BW Offshore: Papa Terra project update
The EPC conversion project P-63 (Papa Terra) is under construction at the COSCO Dalian yard in China. As a consequence of increased work scope compared with initial plans, the departure of the unit has been delayed. A thorough review of the consequences of the extended yard stay and additional scope has resulted in a revision of the forecasted cost for completing the project. The second quarter will as a result be negatively impacted by USD 50 million. BW Offshore will release the second quarter results 2012 on 30th August 2012 as previously announced.
The additional project costs are mainly linked to increased steel replacement, completion of the boiler systems, increased engineering and commissioning cost and increased yard costs associated with the delayed schedule. All possible efforts are being made by BW Offshore and its Brazilian partner to meet the overall project schedule requirements from Petrobras.
The Papa Terra project is accounted for as a fixed-price construction contract where revenue is recognised in accordance with the "Percentage of Completion" (POC) accounting method. BW Offshore is receiving milestone payments from the client Petrobras throughout the project period.
For further information, please contact:
Knut R. Sæthre, CFO, +47 9111 7876 (Media)
Kristian Flaten, Vice President IR and Corporate Finance, +47 9509 2322 (Investors/analysts)
About BW Offshore:
BW Offshore is a leading global provider of floating production services to the oil and gas industry. BW Offshore is the world's second largest contractor with a fleet of 14 FPSOs and 2 FSOs represented in all major oil regions world-wide. BW Offshore has an excellent track record on project execution and operations, as well as a robust balance sheet and strong financial capabilities. In more than 30 years of production, BW Offshore has executed 38 FPSO and FSO projects. The company is listed on the Oslo Stock Exchange. Further information is also available on www.bwoffshore.com
This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)