Prosafe SE

Good morning and welcome to Prosafe's Q1 2022 presentation, and apologies for the slight delay to those online. And thanks to those in the room for showing up in person.

It's only been 2.5 years ago since we were here last time. So thanks for showing up even though in our seasonal business, the Q1 report is not always the most exciting.

But not too bad at this time. On our team today, Stig, as you know.

And as we are a bit in transition, Robin Laird at the back of the room is here on IR as well. So he is available for questions.

So that's the team for today. The disclaimer, as -- you will be familiar with and is identical to previous disclaimers.

The agenda for today, you will always be familiar with that. We'll mix it a bit up.

And so I will take the first and the last and Stig will take the two in between items. Highlights for the quarter, and I guess the main -- before we go into the highlights for Prosafe, I guess the main highlights in this quarter has been the macro environment for oil oil and gas.

As a customer put it, we have seen a 180-degree turn in 180 days in terms of sentiment, 180 days referring to the Glasgow Summit, where a lot of focus on not producing oil and gas in my native Denmark. The government had an initiative inviting countries to join, simply to leave the resources in the ground.

And now as we all know, it's about reliability of energy supply. So that shift, especially in Europe as we are phasing out dependency on Russian energy, is something that will have a profound impact on our business in the years to come.

The second nonhighlight on this slide for this quarter or since we last saw is visible in the room. We have a significant change on our shareholders.

No disrespect to our banks who have supported us through a difficult time, but all but one have sold out. So we have a much more vibrant shareholder base, and that is definitely positive for Prosafe.

Then we go quickly to the highlights. We have an unusual high utilization of 68% for this low season.

It's a bit artificially high as we have some vessels in standby and not really generating a lot of revenue but better than being in layup. EBITDA, just short of $5 million for the quarter, and cash around 0.

So that leaves us with a liquidity of $64.7 at the end of the quarter. On the activity, 6 out -- or, sorry, 5 out of 7 rigs have been in operation for all of mainly parts of the quarter.

And the 6 I was -- slipped my tongue, is the fact that today, we have 6 out of 7, or all except Scandinavia, in operation. And when we have high operating activity, it's good to see that we have 0 incidents.

And we have a strong performance. I don't think we have had any downtime or the like in the quarter.

And as you have seen, we have recently added $236 million to our contract backlog at improving margins. In Brazil, 2 4-year contracts, although the second is not -- the ink is not dry on the second contract yet, but that is our expectation.

And that means that when you look at the bidding ongoing in Petrobras, there's another 4-year contract on offer. And thereafter, there's a 650-day contract where we may come into contention, which I understand as when you are a bit lacking the field, and then all of a sudden you are propelled to the front of the fields.

So on the backlog, a significant increase. A good floor in Brazil on top of which we can play the market in the North Sea.

With that intro, over to you, Stig, and the numbers for the quarter.

Thank you, Jesper. Good morning, and welcome, everyone.

Of course, Jesper have pretty much covered the financials already in his introduction, but let me, for sake of order, go through them anyway and also say that it's -- of course, looking at the numbers behind me, it's kind of difficult to prepare (sic) [ compare ] this quarter with the same quarter last year while we were in restructuring. So I guess it will be easier and more interesting from the next quarter when we can start -- or a little bit later in the year rather when we can start seeing some comparable numbers due to the restructuring.

But in any event, as Jesper alluded to, utilization of 68% is the highest since 2015. So, as we have always said, in terms of earnings and performance, we need to start with activity and utilization, and then hopefully rates will follow.

And then hopefully, earnings also may follow. Jesper also alluded to another important fact, and that is that the business is cyclical.

So even though we tend to have long-term contracts in Brazil 365 days a year, which is steady state, the North Sea market, with a few exceptions like today, we have 2 very long-term contracts in the U.K., but typically seasonal with most of the activity in Q2 and Q3. And that, of course, normally impacts, let's call it, the EBITDA and the cash flow curve through the year.

So just to remind you about the seasonality of the Prosafe business model since it's been a good while since we've been able to see people and explain it to you. In any event, on that basis, $36 million of revenue in the quarter, significantly higher, of course, than the same quarter last year.

That's comparable. We had, as Jesper said, 5 vessels partly or fully operational in the quarter.

But just to mention that the Caledonia was, as we say, in standby in field. So it was pretty much breakeven at an EBITDA level until it went on hire on the 7th of March but, of course, much better than staying in layup.

So it contributed to EBITDA but really not to increase the EBITDA. And of course, some of the vessels started quite late in the quarter as well.

If you look at the costs, $31 million, low compared to the same quarter last year comparing to revenue, but still impacted in the quarter by, what we say, ramping up two vessels, the Zephyrus in particular that commenced in January and the Boreas that commenced on the 1st of May. So the ramp-up activity, i.e., preparing vessels for contract, getting the crew, getting the vessels ready, training the crew, et cetera, of course, adds costs until we get gangway down and start earning day rates.

So that gave an EBITDA in the quarter of $5 million, which is a significant improvement from the negative number last year. And I would say that we are -- keeping in mind the seasonality comment, we are well on track compared to what we have communicated earlier to the market.

Depreciation, steady state. Varies a little bit, but it's pretty much steady, not much to say.

And it gives then an operating loss in the quarter of $2 million although compared to a loss of USD 59 million in the same quarter last year. Interest expenses, significantly down, obviously, due to the restructuring and much lower debt.

I can mention now that we are unhedged for various reasons. And therefore, the interest cost will come up a little bit going forward in light of the inflationary pressures and the U.S.

LIBOR curve that I'm assuming you're all familiar with. But we'll keep track on that going forward and also consider our options.

So to make a long story short, some taxes as well, not much, but some taxes pretty much related to international operations in particular in the U.K. but even more so in Trinidad/Tobago where the Concordia is currently operating.

So that gives a net loss in the quarter of minus USD 12 million compared to minus $90 million last year, and also then a negative EPS until further at the bottom line. Quickly on the balance sheet, not very much to say.

It's a clean balance sheet. No intangibles, no goodwill, no nothing.

Just some debt. A nice or an okay, comfortable cash position, I would argue, and a positive -- again, positive book equity.

Cash position at the end of the quarter of USD 65 million. Okay.

Let's then do a quick review of the commercial update. And I think this chart, yes, proud of this, this to us and hopefully to you is a sight for sore eyes.

Q1, we had 5 vessels in full or part operations. But as we speak, we have 6 vessels since the Boreas commenced, as you see on top of the chart, on the 1st of May at the Ekofisk drill for ConocoPhillips.

As I mentioned, Safe Caledonia currently operating on a long charter in the U.K. for Total.

She'll be busy until November time at least. Concordia, I alluded to, she's on a contract until end August for BP in Trinidad.

And just to remind you, the day rate on that contract was increased from about $88,000 a day to $121,500, and that change kicked in towards the end of the first quarter. So the effect of that will come as from Q2 in essence.

That's a nice step-up. Safe Eurus, steady state in Brazil for Petrobras until end of Q1 '23.

But of course, we have announced yesterday the -- that we were at least declared winner of the last bid, and we are relatively optimistic, I would say, that, that will continue for Petrobras for another 4 years. So that gives us a visibility and a nice cash flow soul at the -- as a kind of a floor in the company.

And that, of course, combined with the Notos, which has won a new 4-year contract, gives us a solid foundation upon which we can try to create additional value primarily from the North Sea stroke global fleet. Scandinavia hasn't been working for a while, but it's a great vessel.

Old, yes, but the life is ahead of her. She is being actively marketed.

And in this market, there might be more opportunities even for Scandi than we have seen for quite some time. So let's see how that develops.

And then we have the Zephyrus, as I said, operating for, yes, at the ETAP field in the U.K. And then finally, Nova, Vega, the two options, we are in dialogue with COSCO.

Very optimistic that we will be able to agree something with them such that Prosafe maintains the optionality related to the Nova and the Vega, which are both completed worldwide vessel operations and ready for action when the opportunities arise. And then finally, what does this mean?

Well, of course, it kicks in into our order backlog. Now this is -- just to be clear on that, this is indicative.

This is -- to the far right, this is our actual order backlog per Q1 '22, although we have added on top of that the contract for the Notos as well as the likely contract for the Eurus and also possibly a contract for the Boreas in Brazil, which we have also talked extensively about. So when you look at this interesting development, we have to go back quite a few years to see a similar order book for Prosafe.

And as I said initially, we need to start with activity and utilization, and then hopefully earnings will follow. So right now, I think we're in a good place, and then we'll see how things develop.

And I think with that, I'll leave the word back to Jesper. Thank you.

Thanks, Stig. Yes.

Just on the Eurus, so what is the process in Brazil? You are declared winner, then there's a 5-day appeal period, and appeals are not unusual, although I would be a bit surprised.

Then you go to contract award and then signing, which can be a lengthy process. But at this stage, we are fairly optimistic that, that will all go in order.

Status and strategy. And for those who think whether we have changed strategy in the last quarter, that's not the case.

So there might be a few familiar slides, but I'll try to emphasize a few new items. Supply overview, admittedly very simplistic.

So only 23 vessels on this slide, mainly semisubmersibles. But as we are focused on consolidation, a good overview.

As a jack-up on the slide, do we compete with jack-ups? No or very rarely, but it's still one of the players.

And to understand the supply picture even better, you have to take a regional look, but I think this will suffice. And what do we see in the market?

We see a trend that customers are securing the high-spec capacity. But we are also seeing that the Tier 2 vessels are gaining work.

So we can see how utilization is basically improving in the Tier 2, which I think will be positive for the entire industry that we are in. Definitely improving for Tier 2 assets.

A quick slide on costs. No changes to last time, but we are very focused on cash conversion.

So it's good to keep an overview. We do not have any near-term SPSes until we get -- or unless we get activity-driven work for Scandinavia.

SPSes '24, '25, we normally budget with $1 million or $2 million per year in CapEx per rig and $4 million to $5 million in SPS. And that should mean that if we maintain our vessels well and invest a bit in them, there should be nothing wrong with even the oldest vessels having at least a 10-year horizon ahead of them.

And that's important to us. And as you will see from our numbers, the older rigs we have, they make the same earnings as the new rigs.

And that's important for us. This slide is going back to the introduction, I think.

When we introduced or introduced this slide, I think it was actually part of a reminder to our stakeholders that even in the stated policy scenario, announced pledges and the sustainable development scenario, oil and gas played an important role for the longer period. We had to basically remind our investors that that's the case.

And as I mentioned in the last 180 days, I don't think that is necessary anymore, at least in the near term, as we understand our customers' focus is basically producing as much as they can in the near term. That also means that today and tomorrow, I don't expect that customers will engage in large shutdown programs of the fields.

It's about keeping production going. And I guess the other point, as we mentioned, is the easy barrels are gone.

I don't think there's any doubt that this has been an underinvested industry, so we do expect activity to pick up very significantly. A bit on the snapshot on the North Sea and Brazil.

You've seen that before. In 2022, there are 5 rigs and there are 5 contracts.

In that scenario, ideally the rates should have been better. I think 3 out of the 5 contracts should have been at better rates, but I'm not pointing fingers of anyone.

But it was not so easy to understand in the early part of the year that we'll be sold out based on what happened. But in this scenario, there should have been better earnings.

In Brazil, Petrobras currently have 6 rigs. I think that will increase, looking at their activity pattern.

And the other important for, let's say, Tier 2 market in Brazil is the fact that on top of those 6, I think there are or will be shortly 4 additional vessels, 2 for Equinor, 1 for MODEC, 1 for SBM. So we see the internationals also playing a larger part in Brazil.

Their campaigns are often shorter, and, therefore, they can be possibly a bit more flexible on technical specification. Then for the North Sea activity, as you all know in this room, there is a tax incentive in Norway, which means that there is a big focus on getting the PDOs in this year, and that will then spill over into activity in '23, '24, '25 and onwards.

And we have also seen positive interest in the new licensing rounds here in Norway. So I think the macro indicators for our industry is very positive, and we expect that to spill over in activity for us.

The -- Brazil has a bit more visibility in the sense that Petrobras has a 20-plus FPSO program being phased in, and I think I saw recently another 3 FPSOs being contracted by Petrobras. And that means that with these larger topsides, the larger FPSOs coming in, that will increase the labor intensity, the labor requirements for maintenance, and that will also increase demand for Petrobras for the services we render.

Finally, the recap of our strategy, which has not changed. Consolidation, very much on our agenda.

But of course, it takes two to tango. And in the meantime, of course, our cost and safety performance are the enablers that we can be profitable in the industry.

We need to have commercial outperformance with our fleet. We should be in a position basically to optimize that and do better than peers.

And finally, greenhouse gas emissions is something we are working on. We right now have a vessel at Ekofisk that is operating in a new mode that indicates a significant saving on fuel and therefore emissions which could be a fleet-wide standard.

So very briefly, without repeating myself or Stig, high fleet utilization, liquidity of almost $65 million, EBITDA $5 million and about 0 cash in the quarter; increased our backlog very significantly with the 2 latest Petrobras awards, which means we can focus on what's next in line; and I think in this quarter, the macro environment surrounding oil and gas has changed quite fundamentally, which will benefit us. So with that, we will be happy to take any questions.

And there may be some online as well.

Yes. Maybe we should use that as an icebreaker to get you guys started.

But I need to put on my glasses, unfortunately. That's just the way it is.

So this is from, hope you don't mind, [ Anders Schwindler ], investor in Prosafe. "So can you say something about the size of the Petrobras contract for Boreas?"

It's that simple. You can do that.

Yes. It's -- the bids in there is $117,000 a day for 650 days.

And I'll have to emphasize that getting it from the North Sea to Brazil, if we do that, has some compliance work and some mobilization costs.

Good. Do you believe that the Scandinavia will get to work in 2023, i.e., next year?

That's a very good question. I guess the Scandinavia case is a bit binary.

It's -- as you can see in one of the other slides, it's about $3,000 a day in layup. It's a good option.

A high tide lifts all boats. It's not fixed for all fields, but it's a very good rig.

It's well maintained. It has life in front of it.

It has modern equipment for 2016. We have had some dialogue about it, and we hope that we see continuing interest.

But I will not guess exactly when it will come into operation.

And then the Nova and the Vega. "Do you believe that the Nova and the Vega will, i.e., come in actively to the fleet soon?

Or is it more a long-term potential?"

Yes. It depends on how the market develops.

As you will see from our fleet overview with the Notos and Eurus in Brazil and the Boreas on offer, we are more or less sold out in Brazil. We think the market in Brazil will grow even further.

These two vessels are good candidates, so we are naturally working actively on positioning those vessels for opportunities in Brazil. I think Brazil is the most realistic.

You need to have some visibility before you take them into the market to make sure it's buoyant and solid enough, and that's one of our key focus areas.

Yes. Very good Jesper.

And then finally, this is a question we've had quite a few times. So relevant again to the Eurus and the Notos long-term contracts.

"So are there any options to get higher day rates for the Notos and Eurus if the market get much better in -- over that 4-year period?"

Yes. I think the starting points we always focus: if we can sell more, can we add additional services?

We had a dialogue with a customer. There's no, let's say, rates indexing or anything like that.

So it is flat. But of course, there are opportunities.

And we have previously had contracts in Brazil that had more than 100% economic utilization because of what I mentioned, but I think the key, in addition to that, would be to control costs, to see the inflationary pressure that we are seeing elsewhere in the world and in Brazil, too. Naturally, the currency development has set that off in recent years, but that's something we are focusing on.

The second thing which is important for those contractors is fuel consumption as we pay for fuel exceeding 20 cubes a day. That's not so much at some installations, but others it could be a bit more.

So those are, I guess, the key to delivering on the EBITDA we expect from the contracts. And then there's optionality in extracting more earnings.

And finally, Petrobras have some pilot projects in emissions reductions. And with 2 vessels on 4-year contract, we look forward to having an interesting dialogue with Petrobras.

And this -- Notos and Eurus have dual fuel capability. It's not available in industrial sizes in the market right now, but it could be a future spec in Brazil.

Yes. And of course, just to add, Jesper, if you don't mind, to add on top of that, that's two vessels providing a very nice soul floor cash flow-wise.

And of course, the interesting play is then the flexibility related to the five remaining North Sea stroke international vessels. And based on history, that's potentially potent.

Oh, yes.

Okay. There are no further questions so far on the Internet.

Oh no, here's another one. This is [ Hiettel Schusun ], Profund Investment Director.

"How do you expect OpEx per day per vessel to develop going forward? Inflation, general question mark.

Brazil, specifically a question mark." So you have alluded to it, but...

Will you?

No. Well, yes, I can start, but...

Yes, if you say so.

No, I didn't mean no. Yes, I can.

And that's a supplement. We're -- I think we said before we're not immune, of course, to inflationary pressures.

One specific that I did address, call that inflation, that's interest cost. So we're currently unhedged.

So that's one element that we are looking at. But it might not be easy for us in the short term to mitigate that much, so the interest cost might come up a little bit.

But going back to business and the operations then, we have seen also in Prosafe some, but I would call it marginal, cost increases, i.e., marginal, a very low percent, related to different things. So one being that we have just seen that we might need to add a crew or two on one of -- some of the vessels basically to operate more efficiently.

But it adds, of course, some costs in the short term. There's been some competition for resources starting, so there's been some salary increases as we're competing typically and just drillers offering longer-term contracts normally, et cetera.

There might be some things related to fuel. Specifically in Brazil, clients normally pay the fuel.

But on at least one of the contracts, there is a cap in Brazil. So if we operate above that level, then we pay the rest ourselves.

And of course, as you know, prices of fuel hasn't actually fallen. So there's been some elements and we're not immune.

But so far, very, very modest, and it's really high on our agenda.

Yes. And I guess for transparency, the rates in Brazil is paid in U.S.

dollar. And of course, the majority of our cost is in Brazilian currency and we don't have a hedge of that.

And historically, at least the reducing -- or the exchange rate has basically made it net cheaper for us in dollar terms to operate the rigs in Brazil. But inflation is very much a focus area for us, yes.

Yes. Good.

So that's it. Anybody else?

Yes?

A quick question on the economics in Brazil. So you have been very optimistic on the -- on your fleet now.

How soon did [indiscernible] all the rigs? Is it fair to assume that it's $40,000 roughly in OpEx and [indiscernible] are running around $60 million in annual EBITDA from those 3?

If we get rid of [indiscernible].

That's a very specific question, and that's fine. But I think I would start by responding in a different way.

We have been quite consistent on -- well, first of all, I would like to say that on the Boreas, maybe you want to address that after, Jesper. We are very optimistic on the Eurus.

Notos is done. Eurus, very optimistic.

Boreas, also optimistic, but it's a little bit of a different play also for Prosafe. I mean it could be good to be in Brazil on that contract, but it could potentially also be very good to be in the North Sea.

And you can follow up on that. When it comes to the operating costs, yes, we do talk generally about low 40s in Brazil.

So on that basis and given that we have been very open on the day rates, $75,000 now on the Notos, Eurus will be operating at $86,000 and the Boreas at $117,000, then your number might be roughly right.

Yes, somewhere between best case and high case, I think it is. But -- and one of the things, Sondre, is one of the elements that we struggle to control in Brazil is the fuel cost because the fuel consumption partly depends on the activity pattern.

Are we mobilizing between fields? Are we working against a fixed installation?

Are we working against a spread moored FPSO, turret moored, where we follow a target. That has an impact.

Unfortunately, that is at Petrobras' discretion and not something we can do about, which is not satisfactory by any means, but that is the reality. So yes, $40,000, $45,000 depending a lot on especially the fuel consumption, I think.

And I saw you had a question. So just one more thing that Jesper did allude to, and that is that that's partly reflecting in -- reflected in the day rates that we bid on the Boreas as well, that Boreas needs to be moved, right?

And the days are over when Petrobras simply paid us $20 million to mobilize from X to Y. So we have to incur some costs in the area mob from the North Sea and down to Brazil.

And obviously, that will impact the EBITDA calculation in the area mob, which in this case would be $23 million. So -- but other than that, yes, I think that gives you enough coordinates.

And I think it's -- what is the probability of Boreas happening? I don't know.

It's too early to say. There's another tender that will have to be determined first, and that will see who is in front or behind us on the 650 days.

It's too early to say. And then I will just agree with Stig that from a prioritization point of view, it's not an easy trade-off between having capacity in Brazil for 650 versus being on the market for 2024 in the North Sea.

Not easy.

But maybe I'm just confused and just it's hard to get sources, right? But if you look at the TradeWinds article, the TradeWinds article was pretty specific, right?

And then I believe the tender that you announced that Eurus won yesterday, there was a lot more than two, I think. I thought that the Boreas was bidding to the same tenders because then you will have already gotten the result for Boreas as well.

Or is it my misunderstanding? [ This is, well ], producing?

Yes. So the Notos was the first contract that was awarded.

Then came three tenders. The first tender has now been concluded with the award to Eurus.

Then there's the second 4-year tender, which I think is called the [ N10 ]. And that will have to be then concluded.

I think the Eurus and Notos are in there, obviously busy with something else. Then there's the SS Pantanal drilling rig in there.

And then there is the [indiscernible] at $95,000. When you see the [indiscernible], that is ahead of us in pricing on the 650.

So you would have to see that conclude before they move on to the 650 days. That's my understanding of how they would do it.

Very good questions. Yes?

You mentioned that in the good old days, Petrobras used to pay you $20 million in mob...

$17 million.

Yes.

$17 million. I'm always rounding [indiscernible] I like that.

How is that cost now? Would you expect a similar cost to move the Boreas down to Brazil now?

Just a minute. Let me repeat the question for the Worldwide Web.

So the question is really in the good old days, Petrobras used to cover mobilization costs. And how -- so -- and a number of $17 million to $20 million was mentioned.

And then the question is, what will our costs of moving the Boreas from the North Sea to Brazil be comparable to that? That was the question.

Yes.

Jesper.

Yes. So first of all, I think it's an interesting observation that at the early time in the market, Petrobras basically paid for the mobilization, $17 million, China and elsewhere.

Then there's been a period of time where they have not paid mobilization. But mind you, looking at the bidders, it's very likely that for the 650 days, they need someone from outside Brazil to come into Brazil.

So now we are back into a situation where you're not bidding against your -- the other, but you are trying to bring in more. So it might change in basically attracting that.

Our mobilization costs and so on, yes, it's not so easy to say, but definitely not $17 million. I would say somewhere between $10 million and $15 million.

Normally, what you do depends on how seamless it is from existing contract. You go to the Canary Islands.

Normally, you do your upgrades and modifications there. That can be a discussion with Petrobras, what kind of modifications do we have to do.

Some are required by law, some are required by technical specification. Then you move to Brazil.

There's an approval upon arrival. Sometimes they are quick.

Sometimes they are not so quick. But I think when we got the Eurus in there, I think it was 3 to 4 days it took us to get everything cleared.

So we have that system well in place. So in that range.

Okay. Yes, [indiscernible]?

Question on the North Sea. Seems like a bit of a dilemma if you want to get the Boreas down to Brazil or not.

It seems also like an indication of a hot market in the North Sea. I understand there's those tenders up for next year and also picking up already for '24.

And in the period 2010 to 2016, you're in an EBITDA level per unit of $25 million to $30 million. Is that something that could be realistic now in future contracts?

Or is -- I will hand the crystal ball to Stig, I think.

Okay. First, for the other listeners, so the question was really, well, stating a fact.

The Boreas, moving it from the North Sea to Brazil might be a dilemma. Yes, it might be, let's see.

It might be a good dilemma. But -- and then the question was, there's now activities picking up.

There's tenders out. In the good old days, we used to have $25 million to $30 million perhaps in EBITDA per vessel.

So what's the likelihood of seeing such a scenario resurfacing? That was, in essence, the question.

And need to be a little bit careful, of course, in terms of responding to that so it's -- it doesn't become like an official guiding. But you know how this works.

It requires sufficiently many ideally parallel bids compared to number of units available. And then it's utilization and direct.

And of course, the tighter that the picture is, the better bargaining powers we have. That's number one.

But I'm now stating the obvious. I'm trying to come to a point, but you understand what I'm saying.

That's just how the market works. We like those situations.

We like that kind of short visibility. We've been speculating a lot about why is that the case.

Could be many reasons. But it's often in our favor if the clients are a little bit late to the table in terms of realizing we need a flotel.

So we kind of like it. And then our commercial mindset is risk on, i.e., if 1 tender comes out now for, let's say, '24, we are not going to sell cheap.

So -- and then the final point. We did, for a reason, include a slide ourselves in the previous presentation reminding the market about what you just said.

They're kind of earnings potential per vessel that we have achieved many, many years in a row in previous up cycles. And yes, given, of course, the fleet has changed -- now we have 7 on water.

We used to have up to 14 vessels on water, but -- and we also generated $250 million, $300 million per annum in EBITDA. So yes.

Although we're not reminding too much about the guiding for '22, the potential is from the guiding of $50 million to $60 million in '22 and up to 7x the numbers you talk about, and then you're back at $200 million. But this is not guiding.

This is just playing around with numbers. And it's all down to the tightness of the market.

Yes, [ Celina ]?

It's a bit on the side. But given yesterday's announcement by the government to really go all in now on offshore wind and the activity that's likely to trigger, is that anything down the road that you're considering where you might have additional demand?

Yes. Good question.

Yes, good question, [ Celina ]. And that's -- we are following that market closely.

I think where we are now in terms of scale offshore, our vessels are often found to be a bit too large to the concrete. But as we see that develop, it's definitely something we are following.

We have bids for substation installation contracts, different parts in the world. The reality is right now that many are of a bit shallow water, which gives alternatives.

You need a bit more of the scale before we see the economics. You could possibly deploy a vessel in some regions, but it would be, I guess, at lower earnings or much lower earnings than what we see or expect in our existing industry.

But we follow that market quite closely. And I think just to Sondre's, indeed the reality is in the North Sea, we have short visibility.

We see a lot on the macro, but we are still at the wide end of the funnel. So we can see the balls coming down the funnel, but when and where they will drop out '23, '24, $25, yes, I think I would -- it's not because I'm withholding information, but there's just uncertainty about that.

But there are balls in the funnel, that's for sure.

Okay. There are no -- yes, go ahead.

On the Scandinavia that's currently stacked or hasn't operated for a while, if you were to take that out, will you be looking for a long-term program for that? Or could we also put that in a spotty market in the North Sea, for example?

Okay. So the question now is the Scandinavia.

She's been laid up for a while. And then the question is, would we then primarily be looking for a long-term contract for her if we were to reactivate and mobilize?

We are agnostic about the duration as long as the economics are right. So that's fine.

But it's true that the Scandinavia probably has one CapEx for reactivation into accommodation mode and a different one to basically use as tender support. But I think -- it's probably $5 million to $10 million and $10 million to $15 million.

It's about -- so it's not a prohibitive CapEx. We're looking at this.

If you have a field where you want to boost production and use the pumping capacity, I think the economics will quickly stack up. That was a lot of good questions and very refreshing.

Thanks a lot. Thanks a lot.

Well -- yes?

Can you shortly talk about reactivation costs for Nova and Vega as well?

Reactivation costs for Nova -- yes. So the deal with the yard is, of course, they have to deliver the rig with clean certificates.

So part of it is yards reactivation. And then, of course, we need to have a familiarization crew and so on.

But what does it cost to bring it from China to Brazil? It should be less than $20 million at least.

Some is ours, some is the yard's.

And -- yes. And of course, based on the profit sharing, then our costs will come back first to us.

Yes.

Yes. Yes, yes.

Wonderful.

Yes.

So we'll cross that bridge, sure. Makes sense.

Yes?

Can you also remind us on the optionality on the Nova and Vega? What's the agreement there?

Do you -- Can you walk away from it? Or are you on the hook, but you can choose delivery time?

Or how is that agreement sort of...

Yes. So we don't want to walk away from it.

That's the first thing. And I think right now, the yard is preserving the vessels.

So we are keeping a close eye on them and making sure that they are not degrading into a state that would make it challenging. But it's -- right now, it's the yards' responsibility to maintain them, and we have a very close dialogue with the yards, how do we treat this going forward, what does it take to get them into the market.

That's an ongoing dialogue. But we are not -- we don't have any intentions of walking away from those.

Okay. Any further questions?

We have a lot of time. Keep shooting.

There are no further so far on the web.

Yes. Good.

But that was a very good example of our positive development in Prosafe. There are more engaged stakeholders and shareholders.

Thanks a lot for that. Okay.

Thank you. And thank you for those attending online.