Frigstad Discoverer Invest Ltd. - otc.nfmf.nootc.nfmf.no/public/news/5009.pdf · Convert Team Ltd. (ex.Alstom). ... Source: ODS-Petrodata, Frigstad Discoverer Invest, ... © Frigstad

Frigstad Discoverer Invest Ltd.

September 2006

© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 2

DisclaimerThis document must not be acted on or relied on by persons who are not relevant persons. Anyinvestment or investment activity to which this communication relates is available only torelevant persons and will be engaged in only with relevant persons.

This document is incomplete without reference to, and should be viewed solely in conjunctionwith, the oral briefing provided by Frigstad. The sole purpose of this document is to assist therecipient in deciding whether it wishes to proceed with a further investigation of Frigstad and itssecurities. This document is not intended to form the basis of any investment decision andshould not be considered as a recommendation by Frigstad or any Arranger or any otherperson to purchase any securities. This document does not constitute an offer to sell or aninvitation to purchase any securities.

In preparing this document Frigstad has relied upon and assumed, without independentverification, the accuracy and completeness of all information available from public sources orwhich was provided to it or otherwise reviewed by it. The information contained in thisdocument has been taken from sources deemed to be reliable. Frigstad can not represent thatsuch information is accurate or complete and it should not be relied on as such. Any opinionsexpressed herein reflect Frigstad’s judgement at this date, all of which are accordingly subjectto change. Technical details and data may in many cases be preliminary or subject to changeor received from other third party sources without verification, and should therefore not be usedfor any other purposes than mentioned in this disclaimer.

Accordingly, this information is being supplied to you for information purposes only and not forany other purpose. This communication and the information contained in it do not constitute orform any part of an offer of, or invitation or inducement to apply for, securities.


Agenda

Highlights and operational summary

Project details and market update

Financials

Outlook & Summary


Investment highlights

Rig with extreme drillingcapabilities

Controlled construction risk

Attractive slot at costconsiderably lower than mostpeers

Controlled construction cost

Conservative leverage

Strong market fundamentalsbacked by recent deepwaterfixtures


Highlights

Construction of “SS Frigstad Oslo” according to plan

Equity and convertible bond subscription completed March 2006

Agreement with Aker Kværner MH for drilling package to “SS FrigstadOslo” and other main OFE packages

• Approx. USD 30m non critical OFE to be ordered (Of total OFE ofUS$178Mill)

• Remaining contingency of USD 9.5m

Project price remains USD 489m before loan financing

Further strengthened organization

Continued strong market for drilling services


Operational update

USD 240 million equity and convertible bond funding program completed

Main Owner Furnished Equipment packages secured, including

• The integrated drilling package from Aker Kvaerner MH

• Marine Riser package, 10.000 Feet from Aker Kvaerner

• Main Deck Cranes, each 100 Ton capacity, from Liebherr

• The Blow Out Preventer (BOP) package from NOV/Shaffer

Yantai Raffles Shipyard secured Main Builder Furnished Equipmentpackages

• Main Engines, 8 each Wartsila Diesel engines

• Thrusters, 8 each LIPPS (Wartsila)

• Integrated main power package, DP3 and vessel management system fromConvert Team Ltd. (ex.Alstom).


Organisational and Management

Build-up of project organisation as planned.

Strengthened management team:

• CFO: Bjørn C Jacobsen

• CTO: Erling Knudsen

• Accounts & Admin Manager Singapore: Mrs. Jennifer Lim

Senior personnel in offices in Oslo, Kristiansand, Singapore and Yantai(China)

Hiring of key construction supervisory personnel started


Erling Knudsen

Chief Technical Officer

Mr. Knudsen has more than 25 years of offshore dril l ing and rig design experience

Extensive 2nd - 5th generation rig experience including major conversion and new-build projects onsemi-subs and dril l ships

Operational rig management experience with Statoil and Viking Rigs AS

Mr. Knudsen has been an independent consultant to the offshore dril l ing industry since 2003

Bjørn C Jacobsen

Chief Financial Officer

CFO of seismic company Exploration Resources ASA, having led a successful IPO in 2005, and heldthis position until the company was acquired by CGG

14 years of experience as oil services financial analyst

Several years as a business consultant

Mr. Jacobsen holds an MBA from the Norwegian School of Business Administration (NHH 1984) and isa Certified European Financial Analyst (CEFA)

Confidential

Harald Frigstad

Chief Executive Officer

ManagementMore than 30 years of offshore dril l ing and rig design experience of which six years as rigsuperintendent on semi-submersible dril l ing rigs

Mr. Frigstad is the founder of Frigstad Offshore Dril l ing Pte. Ltd. and has served as CEO sinceinception in 1989

From 1987 to 1989, Mr. Frigstad was co-founder of Viking Offshore Dril l ing and was responsible forupgrading and operations of two dril l ships

In 1987, Mr. Frigstad was Dril l ing Advisor on rig design for Norwegian Rig Consultants AS. From 1985to1986, Mr. Frigstad was Operations Manager for the dril lship Compass Dril ler


FRIGSTAD MANAGEMENT, Inc.

Experienced offshore drilling contractorheadquartered in Singapore.

97% controlled by Harald Frigstad

On-site building supervision of the FrigstadOslo during the construction and outfittingperiod, including construction supervisionand headquarters support

The Frigstad Management Inc. team hasconducted rig operations in South America,Asia and the Middle East since 1989

ISO 9001 certification

Frigstad Engineering (owned by HaraldFrigstad) will deliver the license for the useof the D90 DRR DP3 rig design

References – Frigstad Management, Inc.

Note: Includes rigs which the Frigstad team has managed, owned or supervised.

References


Project

The Rig – “SS Frigstad Oslo”Greatest capacity for drilling in ultra-deepwater

• Water depths up to 12,000 feet

• 50,000 feet drilling depth

• Best-in-class deck space and loadingcapacity

State-of-the-art drilling equipment

• Dual drilling capable derrick (2 x 1000 shorttons) – more powerful than any other semi-submersible

• Significantly more efficient than single derrickoperations, reduces operational time ofdrilling operations by 20-60%*

Top-class station-keeping capability (DP3and moored)

Proprietary design with superior costefficiency and performance

• Modern design, secures building efficiency

• Optimized for development drilling

Optimized for operations in 95% of theworld’s ultra- deep water areas*


Move To Deeper Waters


Information listed above is taken from various public documents and may not be confirmed to be correct by the respective rig owners or agents. Information for new construction units may also be preliminary andsubject to changes. * Auxilliary derrick on West Venture, West E-drill, Aker, Odfjell and Stena DrillMax has less capacity than main derrick. Frigstad has a full 2x1000st.Source: ODS-Petrodata, Frigstad Discoverer Invest, World Oil and Odfjell company presentation for Odfjell rig. ^Gross Tensioner capacity is in most cases referred to as the total capacity of ALL tensioners.The actual total capacity as per industry guidelines or structural design may be lower.

Rig Name

Rated

Water

Depth

[ft]

Drilling

Depth

[ft]

Variable

Deck

Load [st]

Quarters

Capacity

Liquid

Mud-

Brine

[bbls]

Bulk

Capacity

[cu ft]

Derrick

Capacity

[lbs]

Full dual

Drilling

Capable

Total

Engine

Horse-

power

Gross

Tensioner

Capacity

[lbs ]^

Cranes

Capable

to

Change

Thruster

Year

Built

DP

CapableDesign

Frigstad Oslo 12,000 50,000 9,370 160 24,892 30,000 4,000,000 Yes 59,000 4,800,000 Yes 2009 DP3 D90 Frigstad

Ranking among semis #1 #1 #2 #2 #1 #3 #1 #3 #1

Ultra deep semis in operation

GSF Development Driller I 7,500 37,500 7,716 160 19,050 27,395 2,000,000 No 40,764 3,000,000 Yes 2005 DP2 ExD

GSF Development Driller II 7,500 37,500 7,716 176 19,050 27,395 2,000,000 No 40,764 3,000,000 Yes 2005 DP2 ExD

Eirik Raude 10,000 30,000 7,717 120 10,419 27,760 2,000,000 No 60,342 1,600,000 No 2002 DP3 Bingo 9000

Leiv Eiriksson 8,200 30,000 6,889 120 10,419 27,760 1,500,000 No 61,200 1,200,000 No 2001 DP3 Bingo 9000

Deepwater Horizon 8,000 30,000 8,816 130 10,185 21,800 2,000,000 No 58,650 N.a. No 2001 DP3 RBS-8D

Cajun Express 8,500 35,000 6,615 130 4,280 23,000 1,500,000 No 40,140 1,600,000 No 2001 DP3 Express 2000

Ocean Confidence 7,500 30,000 6,615 140 10,000 30,000 2,000,000 No 55,086 N.a. No 2001 DP3 H-3.2 Enhanced

West Venture 5,905 29,527 5,512 114 15,454 33,549 1,950,000 Yes* 44,304 960,000 No 2000 DP3 ME-5000 DP

Deepwater Nautilus 8,000 30,000 10,359 130 10,185 24,508 2,000,000 No 25,870 3,198,000 No 2000 No RBS-8M

Stena Tay 8,038 30,000 6,064 130 7,900 28,900 1,500,000 No 50,403 4,260,000 No 1999 DP2 L-767C E. Pacesetter

Ultra deep semis on order

Petromena (2 rigs) 10,000 N.a. N.a. N.a. N.a. N.a. N.a. N.a. N.a. N.a. Yes 2009 DP3 ExD

West E-Drill 10,000 30,000 6,614 128 20,128 30,000 3,000,000 Yes* 43,000 4,800,000 No 2008 DP3 CS-50 MkII (N)

SeaDrill (2 rigs) 7,500 35,000 7,717 120 N.a. N.a. N.a. No N.a. N.a. Yes 2008 N.a. GVA 7500-N

Maersk (3 rigs) 10,000 N.a. N.a. 180 N.a. N.a. N.a. N.a. N.a. N.a. No 2008/09/10 N.a. DSS 21

Aker Drilling (2 rigs) 10,000 30,000 7,717 160 7,548 N.a. N.a. Yes* N.a. N.a. N.a. 2008 N.a. Aker H6

Ensco 8500 8,500 N.a. N.a. 150 N.a. N.a. 2,000,000 N.a. N.a. N.a. N.a. 2008 N.a. Ensco 8500

Odfjell 10,000 37,500 8,300 158 10,693 31,800 3,000,000 Yes* 59,000 3,200,000 N.a. 2008 DP3 GVA 7500-N-E

Ultra deep drillships on order

Mosvold Drilling (2 ships) 10,000 30,000 20,000 160 12,300 34,500 4,000,000 Yes N.a. 3,200,000 N.a. 2008/09 DP3 MOS 10000

Stena Drill Max 10,000 N.a. 16,537 180 11,322 39,000 3,200,000 Yes* 56,000 2,500,000 N.a. 2007 DP3 N.a.

Project

Technical comparison


Derricks Dual Ram Rig

50,000 ft. dril l string10,000 ft riser vertical racking capacity and2000 ft on pipe rack.

Hook Load 2x1,000 short tons

Top Drive 2x1,000 short tons

Pipehandling Drill string and riser rackingsystem

2 x Iron roughnecks

Mud Pumps 4 x 2,200 hp

BOP Stack 15k, 18 3/4”, HT, H2SFive rams, 2 annulars

Riser Tensioning In-line, total capacity 4.8 mill ion lbs. (3.2 Mill.Lbs Opr.)

Main Power 58,000 hp

Deck Cranes 2 x 100 short tons, lattice boom

1 x 25 short tons, knuckle boom

Water Depth 12,000 ft

Dril l ing Depth 50,000 ft

Accommodation 160 persons

Design and Capabilities Drilling Equipment and Systems

6th Generation D90 DRR DP3

Det Norske Veritas

Flag: Liberia

Classification

Length 110 m

Breadth 78 m

Operating Draft 23.6 m

Operating Displacement 52,741 metric tonnes

Principal Dimensions

Variable Deck Load (non Harsh) 8,500 metric tonnes

Liquid Mud / Brine 24,892 bbls

Bulk Storage 30,000 cuft

Base Oil 2,661 bbls

Dril l Water 20,457 bbls

Sack Store 8,000 sacks

Loading and Storage Capacities

“Frigstad Oslo” – Main Features


Large Capacities and Deck Areas

All anchor winchesbelow deck. Thisgives muchmore free opendeck space andmaintenance ofequipment iseasier.

Large Open Deckareas for handlingof many X-mastrees and BOP.Unobstructedaccess forassembly andmaintenance byoverhead cranes,both Port andStarboard

Large 100 ton

deck cranesP/S will handleheavy lifts suchas x-mas treesand change outof thrusters.

160 menmodern livingquarters withonly 1 or 2 mencabins, manyoffices, largefacilities.

Highest capacitydrilling facilitiesworldwide atpresent; 2 x 1000Short Tons

Large andaccessible piperack deck. Onededicated knuckleboom crane forsafe handling

Frigstad D90


Project

Yantai-Raffles Building Process

Modularised building process

World’s largest crane

Spacious dry dock

Large qualified workforce (1,400 in house employees including 250 engineers)


Risks Mitigants

Equipment price volatility

Shipyard fails to deliver

Rig build quality

Cost overruns

Fixed contract price from shipyard and for maindrilling package

Secured prices and delivery times for majority ofkey components (80-90%)

Performance Bond

Standard liquidated damages provisions

Early Completion Bonus

Frigstad holds title to rig from day one

World-class suppliers on all major equipmentand mechanical systems

Larger than normal site team supervisingconstruction and accepting rig (15-20 men)

ISO Certification Processes at FMI

Jumping principle

$9.5 million contingency built into budget

Mitigation of construction risk


Market

Recent Deepwater FixturesNew contracts for UDW units (+7,500ft) last 12 months

Source: ODS-Petrodata and Carnegie.

5/6G Fixtures

Name Owner Day rate Length (dayys) Fixture date Contract start Location Water depth Operator

Transocean drillship 3 Transocean 472,000 1,825 31/08/2006 15/03/2010GoM 12,000 Chevron

ENSCO 7500 Ensco Int. 352,000 730 17/08/2006 01/02/2008Brazil 8,000 Chevron

Stena Drill Max II Stena Drilling 517,000 1,095 14/07/2006 30/06/2008UK 7,500 Chevron

New drillship QGP 365,000 1,826 01/07/2006 01/07/2009Brazil 7,874 Petrobras

Transocean drillship 2 Transocean 475,000 1,460 22/06/2006 01/07/2009GoM 12,000 Norsk Hydro

Stena Drill Max I Stena Drilling 480,000 1,460 06/04/2006 01/01/2008GoM 7,500 Repsol

Deepwater Frontier Transocean 476,000 1,095 02/03/2006 01/12/2008 India 7,500 Reliance

GSF Development Driler III GlobalSantaFe 391,000 2,555 02/03/2006 01/02/2009n.a. n.a. n.a.

Discoverer Clear Leader Transocean 450,000 1,825 01/03/2006 01/04/2009n.a. 12,000 Chevron

Discoverer Deep Sea Transocean 485,000 730 01/03/2006 01/01/2009n.a. 10,000 Chevron

Cajun Express Transocean 460,000 913 01/03/2006 01/07/2007GoM 8,500 Chevron

Discoverer Enterprise Transocean 520,000 1,095 28/02/2006 01/12/2008GoM 10,000 BP

Deepwater Discovery Transocean 475,000 1,095 03/02/2006 01/11/2008Brasil 10,000 Devon Energ

ENSCO 8501 Transocean 331,000 1,095 19/01/2006 14/05/2009GoM 8,500 Nexen

Deepwater Nautilus Transocean 425,000 730 15/12/2005 11/12/2007GoM 8,000 Shell

Noble Danny Adkins Noble 407,000 1,461 22/11/2005 01/04/2009GoM 12,000 Shell

Discoverer Spirit Transocean 475,000 1,095 02/11/2005 06/07/2007GoM 10,000 Anadarko

Deepwater Millenium Transocean 425,000 1,095 02/11/2005 06/07/2007GoM 8,100 Anadarko

Leiv Eriksson Ocean Rig 465,000 731 24/10/2005 29/04/2007UK 8,200 Shell

Deepwater Pathfinder Transocean 395,000 800 30/09/2005 18/06/2006West Africa 7,500 Shell

Belford Dolphin Fred Olsen Energy 420,000 1,040 15/09/2005 01/01/2007US GoM 10,000 Anadarko

Leiv Eriksson Ocean Rig 450,000 910 31/08/2005 15/03/2007West Africa 8,200 Shell

CR Luigs GlobalSantaFe 392,500 730 29/07/2005 24/12/2006US GoM 10,000 BHP

Ocean Endeavour Diamond Offshore 271,000 730 27/07/2005 30/01/2007GoM 8,000 Devon Energ

Leiv Eriksson Ocean Rig 373,000 365 24/06/2005 14/03/2006West Africa 8,200 Total

Sedco Energy Transocean 175,000 70 16/06/2005 30/06/2005West Africa 7,500 Chevron

Eirik Raude Ocean Rig 405,000 730 14/06/2005 22/03/2006UK 10,000 Chevron

Deepwater Discovery Transocean 364,000 730 08/06/2005 19/07/2006West Africa 10,000 Total

Noble Dave Beard Noble 220,000 1,825 03/06/2005 15/07/2008Brazil 10,000 Petrobras


Financials

Key figures

231 924Total assets

21 568Total liabilities

-172 194Net interest-bearing debt

188 895Cash and cash equivalent at end of the period

(1 428)Net profit/(loss) for the period

(3 687)Other operating expense

2 259Interest Income

First six months 2006USD Thousand


Outlook and Summary

Project on Schedule

Project on Budget

Amongst the most attractiverigs for its market segment

Very strong MarketFundamentals

Documents

Frigstad Discoverer Invest Ltd. - otc.nfmf.nootc.nfmf.no/public/news/5009.pdf · Convert Team Ltd. (ex.Alstom). ... Source: ODS-Petrodata, Frigstad Discoverer Invest, ... © Frigstad