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PRESENTATION 4 Quarter 20 February 2003

PRESENTATION 4 Quarter 20 February 2003. Profit and Loss Account 4Q02 – DSND Inc. Balance sheet 4Q02 – DSND Inc. Profit and Loss Account 4Q02 – Subsea 7. Balance sheet 4Q02 – Subsea 7. Backlog 4Q02 – Subsea 7.

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PRESENTATION 4 Quarter 20 February 2003

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  1. PRESENTATION 4 Quarter 20 February 2003

  2. Profit and Loss Account 4Q02 – DSND Inc.

  3. Balance sheet 4Q02 – DSND Inc.

  4. Profit and Loss Account 4Q02 – Subsea 7

  5. Balance sheet 4Q02 – Subsea 7

  6. Backlog 4Q02 – Subsea 7 • Subsea 7 has a worldwide order book of approx USD 807 million, compared to approx USD 750 mill at the end of third quarter • Geographical split of Backlog UK USD 460 million Norway USD 128 million Brazil USD 103 million GOM USD 66 million Asia Pac USD 50 million Total USD 807 million

  7. Main objectives for 2002 achieved • Establishment of Subsea 7 • Relocation of corporate holding company • from Norway to Cayman Island • Refinancing of short-term debt

  8. Corporate Structure - Relocation • The DSND holding company has successfully been relocated from Norway to Cayman Islands (from ASA to Inc) • Management agreement between DSND Subsea ASA and the new holding company, DSND Inc • DSND Inc listed on the Oslo Stock Exchange, ticker code DSND • Rationale: • More optimal location for an international company • Improved tax position for non-Norwegian shareholders DSND Inc. 50% • DSND Consub • (Brazil) • Supply fleet • Cable vessel • Modfrag 50% Halliburton Investment in other vessels Subsea 7

  9. DSND – debt per February 2003 • Convertible Bond: • - NOK 300 million • - Duration 3 years from 1/2003 • - Strike: NOK 20,00 per DSND share • - Conversion: At pre-determined date • each month for the entire period • - Interest: 8% coupon • BNDES (Brazil), Two loans: • - USD 8,7 million (until 2012) • - USD 1,8 million (until 2008) • Financial lease on Buccaneer: • - USD 4,8 million (until 2005)

  10. 20 Largest shareholders pr. 15 February 2003

  11. DSND – Non Subsea 7 assets • Olympic Princess • Cable repair and maintenance • Contract to ACMA, an umbrella organization for 21 cable companies, to December 2003 plus options • The vessel is on lease from Olympic Shipping for the same period as its current contract • Buccaneer • Well service • The vessel finalized its contract with Elf Congo at the end of October as scheduled. The company is currently pursuing different short- and long term possibilities for the vessel • Joides Resolution • Ocean Driling Programme to September 2003 (research project/program) • 50/50 owned with Transocean

  12. DSND – Non Subsea 7 assets • Big Orange • Well maintenance • Contract to Dowell Schlumberger to August 2009 (certain rights to cancel from 2005) • 41% owned • Supply fleet Brazil through DSND Consub • 11 owned supply-/crew vessels (one survey vessel) • 4 supply vessels on management • All vessels on contracts to Petrobras • Atria, Helder and Taurus • Currently laid-up • Modfrag • Development of Combat Management System for Brazilian Navy until 2005 • New development contract for one Corvette awarded in Nov.2002

  13. Subsea 7 – The Business • The Business • The design, procurement, construction, installation, operation, maintenance and eventual removal of equipment and facilities for the subsea production of oil and gas • Services may be rendered discretely or packaged dependent on customer preference, geographic location and competitive situation. • Payment may be on a cost reimbursable or “day rate” basis for the delivery of a prescribed service or on a lump sum basis for execution of a particular scope or supply, installation and commissioning of prescribed facilities

  14. Trends – Consolidation taking place • Customers consolidate: A few ultra large players (10 oil and gas companies have consolidated down to 4 ultra large players) • Suppliers/competitors consolidate: • DSND Subsea/Halliburton Subsea • Dresser/Halliburton • Technip/Coflexip/Aker Deep Water • Kværner/Aker Maritime • National oil companies stable but some trend to privatisation • Market activity determined by oil price/economic growth – in the short also by geopolitical events

  15. Oil majors - Cash flow vs. E&P capex In recent years it seems like the oil sector has improved their capital discipline; not chasing projects, when they have high cash flows Killde: DNB Markets

  16. Why is last three years different from long-term trend? • Limited growth in world oil demand growth by 1.5% over the last 3 years • Focus has been on consolidation/mergers (”buying reserves”) • Uncertainty with respect to long-term sustainable oil price

  17. Market view subsea capex (1) • Norway: - 2003 lower than 2002 - 2004 – 2006 expected at 2002 level • UK: - Increase in 2003 compared to 2002 - Expect slow decline towards 2006 • Brazil: - Strong increase in 2003 - Remaining stable through 2006

  18. Market view subsea capex (2) • Gulf of Mexico: - Expect stable capex spend during 2003 – 2006 - Mexico could be strong growth marked • West-Africa: - Growth market - Large projects • Asia Pacific: - Expect strong increase in capex spend from 2002 to 2006

  19. Summary • Positive cash flow from non – Subsea 7 activities • Reduced financial gearing following Subsea 7 establishment and refinancing package in place • Well positioned through Subsea 7 for expected market growth

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