Q4 2008 results

  •                      EBITDA of USD 14.7 million before transactions relating to associates
  •                      Total impairment charges of USD 179.4 million
  •                      YÙUM K'AK'NÁAB has received full dayrates
  •                      Conversions in line with expectations
  •                      Robust level of bidding activity in the top tier segment
  •                      Strong EBITDA growth for the Floating Production segment expected
  •  
    Please find enclosed the full Q4 2008 report and presentation.
     
    FINANCIAL SUMMARY
    Operating revenue amounted to USD 126.4 million (USD 116.8 million). The increased consolidated level is a result of higher activity levels in both the Floating Production and the Technology segments. EBITDA was USD -43.2 million (USD 18.8 million) in the fourth quarter.
     
    Adjusted EBITDA (EBITDA before share of profit and impairment charge related to associates) was USD 14.7 million (USD 14.1 million).
     
    Share of result of associates was USD -45.4 million (USD 4.7 million) in the fourth quarter and relates to the investments in PROD and Nexus. At 31 December 2008, BW Offshore (the Company) owned 23.9% of the shares in PROD and 49.7% of the shares in Nexus.
     
    Loss before tax was USD -273.0 million in the fourth quarter (USD -12.6 million). Income tax expenses amounted to USD 6.0 million in the fourth quarter (USD 4.5 million).
     
    At 31 December 2008, the Company held USD 67.7 million in cash and deposits. The Company has significant unused credit facilities.
     
    Over the next 12 months, the Company expects to receive approximately USD 150 million from variation orders and milestone payments.
     
    OUTLOOK
    The turmoil in the financial markets and the lower oil price could impact negatively on business in the short term with cancellations or postponements of new field developments.
     
    However, we currently see a robust level of bidding activity similar to previous years. In this period of uncertainty, the Company is fully financed at attractive terms and future cash flow is secured by long-term contracts with reputable clients. Beyond this immediate horizon, the Board of Directors of BW Offshore is of the view that the long-term fundamentals of our business remain sound.
     
    The financial results of 2008 have been significantly influenced by several provisions, write-offs and impairment charges. The Board believes that some of these charges may be recovered.
     
    BW Offshore's newly converted FPSOs, BW Cidade de São Vicente and BW Pioneer, will commence operation in 2009 and 2010 respectively. These vessels, in addition to the expected improved performance from YÙUM K`AK`NÀAB, are expected to contribute to a strong EBITDA growth for the Floating Production segment in 2009 and onwards.
     
     
     
    BW Offshore hosts a presentation of the financial results at 09:00 (CET) today at `Shippingklubben` (Haakon VII gt 1, Oslo, Norway). The presentation will be given by CEO Carl K. Arnet and CFO Knut R. Sæthre. The presentation will be broadcasted via webcast, and will also be available for replay. Please visit www.bwoffshore.com for login details.
     
    Bermuda, 17 February 2009
     
     
    For further information, please contact:
    Carl K. Arnet, CEO BW Offshore, +65 9630 3290
    Knut R. Sæthre, CFO BW Offshore, +47 9111 7876
     
     
     
    BW Offshore is one of the world`s leading FPSO contractors and a market leader within advanced offshore loading and production systems to the oil and gas industry. BW Offshore has more than 25 years` experience and has successfully delivered 13 FPSO projects and 50 turrets and offshore terminals. BW Offshore`s technology division APL has delivered solutions for production vessels, storage vessels and tankers in a wide range of field developments. Adapting through competence, in-house technology, solid project execution and operational excellence, BW Offshore ensures that customer needs are met through versatile solutions for offshore oil and gas projects. BW Offshore has as a global network with offices in Europe, Asia Pacific, West Africa and the Americas. BW Offshore has 1,100 employees and is listed on the Oslo Stock Exchange. For more information, please visit www.bwoffshore.com and www.apl.no