Bruno Chabas - Chief Executive Officer Philippe Barril - Chief Operating Officer Douglas Wood - Chief Financial Officer Erik Lagendijk - Chief Governance and Compliance Officer

Quirijn Mulder - ING Lillian Starke - Morgan Stanley Wim Gille - ABN Amro Andre Mulder - Kepler Cheuvreux Mick Pickup - Barclays Cédric Duinslaeger - KBC Securities

Thank you, operator, and welcome all to join us during the half year 2018 earnings update call. I'm joined today as usual by Philippe Barril, CEO; Douglas Wood, our CFO; and Erik Lagendijk, our CGCO.

As always, the disclaimer on slide and now let's introduce the call. And yes I would like to speak about three key points on this call.

The first point is we are in a recovery market. The second point is that further to the Leniency Agreement in Brazil we have access to the overall issue worldwide.

And the third point is our strong results with the cycle and in the first half of this year give us a good financial position to capitalize it for the future. So let me expand on few of those points.

On the recover market today we have two major project under persuasion with the [indiscernible] construction. We're also making Fast4Ward over 2018 with the first Fast4Ward contract in Guyana by ExxonMobil.

Our unique EPC and operating fast record will allow us to capitalize on the growing market. So good processing that the Leniency Agreement in Brazil give us access to the overall market, we can already see that there is strong capacity constraint in the industry.

But again we should be able to capitalize on the investment that we have made in the downturn most notably through the Fast4Ward program. And all of these would give us a high growth potential.

On the financial side, we have seen strong operating performance and strong number. Our financial situation is in order further to deliver a good performance during the year over cycle and we are committed to our dividend policy and of growing them overtime.

Now some of the key highlights for the quarter. The first one is certainly the success that we have adding in Guinea, with the award by ExxonMobil or the second FPSO under the Liza share in Guinea.

The quarter shown an installation of these project is called yield and owned and transfer project, although probably a two year period, we are still in the final phase of the negotiation on this. These program called is that we are making Fast4Ward the reality and it should that these concept is being approve and it gives us the ability to develop larger activity so that then we are ever done as a much faster stage than before.

Some of the key financial number. Obviously our revenues stand at 808 million, we should compose of two elements first of all the decrease in the re-enterprise activity due to [indiscernible] the fleet and some plant maintenance.

All of this is nearly offset by higher Turnkey revenues driven by increase activity. The underlying EBITDA spend of 414 million nearly constant year-on-year for the same reason than the revenues.

The backlog decreased from 16.8 billion to 16.1 billion mainly caused by [Indiscernible] failure and around a net of $100 million of additional order. Our net debt stand at 2.3 billion a decrease of 600 million, mainly related to a strong cash flow from a recent price activity, the net proceeds from the Turritella and Yme settlement which more than offset the investment, the payments of interest and the dividend.

Douglas will give some more details later on the presentation. From an health, safety environment, we are also showing some strong results.

our safety performance remain good, where we are building on last year excellent performance and keeping the focus. We are also on-track to meet our environmental target for greenhouses gas emission flaring energy consumption and all oil released in produced water.

Now with the aim of being relevant for years to come, we will develop then monitor and communicate on key sustainable development goals in the same manner that we have done for the environmental indicator. As such, as you can see we have selected seven substantial development goals for which we are in the process of differing in the goal, the action plan and products that were developed communication plan and the monitoring plan of those.

Last key highlight of the quarter over the last year is really the Leniency Agreement signed in Brazil ,we see the significant change in dynamic over there. Having Petrobras, CGU and AGU part of the agreement and ready to sign this agreement.

At this stage, we are also reengaging with EMPS and obviously we are establishing normal business with Petrobras. This allow us to turn a page after a long process of closing legacy issues from the past seven years.

After four years also we are back in Brazil with the ability to compete on a [indiscernible] and we are looking forward to implement SBM Offshore Fast4Ward program which is an excellent fit for the country. Now, let's go through some of the key macro agreement that we are seeing in the industry and while you can notice the term of our communication getting more positive.

The first aspect is really a macro element and the supply gap that we are seeing happening in the industry. We have seen a lack of investment since 2014.

The supply gap in the production of oil is protected. The question is not if but when, and investment that being required.

As a consequence, we are going to see and we are seeing more projects in the industry and probably more projects that the industry can handle. Given the capacity constraint, the meaningful up term oil and gas services can be expected.

And we believe also that we are well positioned to deliver sustainable competitive results by engaging early by being close to our clients and by remaining disciplined on the type of project we want to go after. Deepwater also continue to gain in competitiveness.

More than 50% of projects in the quarter are more competitive than shale oil. Now the main issue in deepwater is a cycle time.

It takes today eight years to start to get a payback on deepwater development on average. This we need to change and this we have the need to change by developing, by reducing the time cycle.

We believe that SBM should experience Fast4Ward again investment that we have made, our track-record will also help us to derisk the project in the quarter and to accelerate the development. The net effect of these is really a net rate in terms of the number of products that we can see coming at for the year and mainly for 2019.

In 2018 we are seeing four awards to-date and the expectation is that we are going to see anywhere between seven to 10 FPSO awarded in 2018; in 2019 we expect an acceleration of demand for FPSO with up to 14 award in the year. Quite an improving outlook compared to the past few years.

Now the question then is how do we position ourselves in order to capitalize on the different trends that we are seeing in the market. And so these are statements we aim at better defining why we are here as a Company.

So starting with the big picture, energy is basically the challenge to supply a growing population with safe reliable and affordable power. [Oceans] (Ph) also our competitive and sustainable energy, now in the future in a different form; oil and gas and renewable, more than 60% of the population is close to shore and off shore energy growing independently and local prosperity.

I’m glad you to take benefits from those big trends is that we offshore people, with deeper water experts, and this is a illustrated by the fact that today we are generating almost 1% of the global oil supply of oil from deepwater. We have a unique set of values in entrepreneurship, ownership, care and integrity.

Our value proposition is centered around key themes, technology, project execution, operation and financing. In other word, we commit to operate and make happen the thing that we invent, develop and deal.

Our track-record is unrivalled and [indiscernible] going forward. So in our strategy to grow, extend and create value is centered around three pillar ranging from implementing to installation by creating a new future for the industry.

So we optimized SBM deals on this experience to grow our business, generate cash flow, create value from solutions, from a program solution, and also we are investing Fast4Ward and digitization to transform the experience and leverage on our experience. In innovate, we are focusing on the gas and renewable market and in new solutions for the industry going forward.

So let me try to illustrate to give you example for each pillar, in the next part of the presentation. Under optimize, you can see our track-record in operating our flat fleet withstand 99% over time, and this is pretty remarkable given the site that we are producing 10% of the global oil in deepwater.

Now during the quarter or during the first half of the year, we work on the life time extension and maintenance of the Capixaba FPSO. So you can see a small dip during the quarter to a 97% of uptime.

Now all of this show that uptime is not given, is really driven by the experience that we have and the track-record that we have also. Now [indiscernible] we have been speaking a lot about the Fast4Ward project.

Now Fast4Ward is much more than a set of project, is really the way working is enough to our business and we see integrated in everything that we do. So far so well, we have transform the business by reducing cycle time, de-risking project and improving reliability, quality and safety.

It’s based on five key principle, which applies through the full lifecycle of our product and services. Those five principles, are client first, standardization, flawless execution, integrated supply chain and enabling digital solution.

Again, this a the ways of working is much more complex than one product, is really what you makes SBM Offshore different. So far so well, we are really providing a new answer to the industry, by reducing cycle time, de-risking project, and enabling lower breakeven points.

We also saw in this up cycle is threefold. It's first of all to be extremely selective in the project we are going to be targeting.

Taken a role to apply this Fast4Ward approach to our business, which will during major benefits in cycle time, de-risking projects, in the complex industry and also keep the breakeven prices [indiscernible] low. And again, Fast4Ward is one way of working by which we aim to create significant and value to our stakeholders, our clients, our shareholders in the industry.

Now, why is cycle is important? And through this slide, we can shoot several points.

The top slide, show that the time to first oil show an impact on oil company returns under different scenario, so on time delivery versus delay or accelerated delivery. So every one year of acceleration, improves the breakeven price by $8 to $10 above, even [indiscernible] of 15%.

On the second chart, we show the NPV impact on the 12 months acceleration. So translating the impact of the 12 month acceleration into an NPV gain, this slide show gain results of up to 1 billion depending on the oil price.

Again, Fast4Ward can generate huge amount of values to our clients and to our shareholders and it’s really a program which is getting a lot of traction because of those key indicators. The second aspect is deepwater development is an risky business, and this has shown through the experience that the industry has seen in delivering FPSO well by only or less than 30% of FPSO deliver on time.

The Fast4Ward project, aim at lowering the risk and increasing the return for our clients and everybody and this is also the experience that we have, the standardization and the integration of the supply chain. Again this shows that the experience matter under this program.

Now, the world is changing. In a way we provide safe, sustainable and affordable energy from the ocean for generations to come.

We are looking at the energy mix evolution and positioning ourselves in the growing market. From the chart it’s clear that we can see a change in the evolution of the energy mix.

Oil will remain dominant, but it’s relative share will decrease. Gas would become a, as big as oil and form the transition fuel.

Renewable is ramping up also from a small base. Although, we want to position SBM’s growing market and in particular let me give you some example in the gas market.

We have been awarded to FEED on the new-build FLNG New Age for associated gas project offshore Cameron and we are working with reputable world-class partner, which is responsible for the liquefaction on this project. The FEED for the FLNG will apply the Fast4Ward principal as discussed previously.

This new deal creates another competitive project and product in this growing market. On the renewable side, we are really committed to further develop our floating solution, wind solution.

So on this, I’m passing the floor to Douglas to expand on the financial results for the first half of the year.

Thank you Bruno and good morning everybody. So another set of good results for the first half of the year, whether a three main themes.

The first two are the recovery in Turnkey and the sale of Turritella, which are impacting the numbers on this page. And then the third is the changed assumption in Liza 1 ownership, which impacts outlook and which I will explain further in a moment.

So looking at the metrics on this page underlying year-to-date revenue of $808 million and underlying EBITDA of $414 million were broadly in line with the same period last year, where strong operational performance particularly in Turnkey, helped in compensating for the impacts from Turritella leaving the fleet. And now on top of the underlying results, the EBITDA, we had an additional 233 million positive impact from the gain on disposal of Turritella and an additional settlement in the Yme insurance claim bringing total reported EBITDA to $647 million.

And here Turritella was most of this additional amount $217 million with Yme adding $16 million and that’s net of related legal costs. Also to note, for consistency going forward, we are not restating the impact of IFRS 16 from the underlying results and this had a $50 million profit impact for the first half of the year.

And we are going to do the same to guidance, which I will come back to at the end. Finally, the backlog decreased somewhat 4%, and that debt decreased by $600 million massive function of repayment of the Turritella loan plus regular project debt redemptions.

Now to provide some additional details on the segments. Starting with lease and operate.

So we had revenue of $664 million and EBITDA of $427 billion this was in line with expectations taking into consideration the fact Turritella left the fleet in January plus some planned maintenance and EBITDA margin came in just above 65%. Then Turnkey, where we see a recovery with those revenue and EBITDA up versus the same period last year.

Now we would have actually expected even more based on the assumption of partnering at the start of the year for Liza 1 project. So now the moment to update you on this.

As we communicated at the time of our announcement on the Liza 2 feet and EPC award in early July. Discussions with the client are underway regarding a potential accelerated transfer of ownership within two years of startup.

As a result, we have determined that from an operational and financial perspective it would be optimal to retain full ownership as oppose to partnering, we are therefore updating the guidance accordingly to reflect the fact that the associated margin and revenue that would have been booked in the Turnkey phase during construction will now move to the lease and operate base a massive line with the additional cash flow we will now receive during that period. But not withstanding this, we saw a significant increase in Turnkey revenue of over 70% up $64 million to $154 million as a result of increasing activity.

The main drivers being the Castberg Turret project fees, off shore contracting activities and the [Indiscernible] business. Underlying Turnkey EBITDA also increased up $40 million to $17 million driven by the increased activity with all engineering resources pretty much occupied, lower overheads and successful closeout of outstanding items on finalized projects.

The Turnkey also enjoys the majority of the $50 million IFRS-16 benefit I mentioned. Now given the one-off nature of the project closeout items, and some phasing effects it's going to be challenging to sustain this level of results to the year-end, and as such we currently see Turnkey as coming in around the breakeven at the year-end.

Then as we noted the button the corporate side EBITDA was basically flat half-on-half around 30 million. Here on this slide we are putting all the pieces together, I think we have just covered the storyline on revenue and EBITDA, but looking at the both driven group P&L and overall underlying net income, here we have an increased half-on-half to $81 million, the main driver of this as you can see from the slide the fact that financing costs decreased at the time of loan repayment driven in particular by the Turritella loan repayment.

Now on to the cash flow on a directional basis. So only cash in front, we had strong overall underlying cash flow from operations, driven by lease and operate on top of which we had better positive investing cash flow plus the one-off proceeds from Turritella and Yme.

And note here, we include the net cash impact for Turritella, so that's after debt repayment and partner compensation. Looking at the uses of cash the underlying cash flow was more than sufficient to cover regular debt related obligations tax and the dividend.

Then we made significant investment in growth, principally Liza 1 and the Fast4Ward for which we also used a bit of corporate cash. Overall then, even with this significant investment we have maintained the healthy cash balance at the end of June with just over 840 million.

We should keep in mind here that we will be paying out around $190 million within the next three months under the Brazilian Leniency Agreement, plus we also have outstanding in the region of the 150 million to payout from the gross Yme proceeds. Than the direction of balance sheet.

For the first half balance sheet, very little impact form IFRS-9, but associated with the early adoption of IFRS-16 is an increase in the debt line item for the lease liabilities of around 200 million as of June. On the top of the balance sheet, you see the movement of the Turritella sale, the impact of the Turritella sale was the main driver of movement in assets with an associated reduction in liabilities and related to which the provision movement was mainly the release of provision for Turritella partner compensation.

Just on the Brazil provision as previously announced this stays the same in aggregate around $300 million. there have been some movements in the component parts, the [2-2] (Ph) redenomination of amounts into different currency and an update in actuarial assumptions for future payments.

So you this slide on cash flow model and cash allocation approach a few times and we are showing it again to reconfirm our approach. We have benchmarked financing options for long-term lease project and this shows that our current approach of raising project level equity together with non-recourse project financing is competitive.

Particularly also considering risk mitigation offered by this type of debt financing. So this remains the current base case for long-term lease and operate projects, but we intend to put new lease and operate projects under the new platform we mentioned in February, which we now have in place.

This will allow us in future to access a broader range of funding options plus optimize overall financial efficiency and flexibility. We have also explored options for improving the structure and flexibility of the revolving credit facility, but it’s fair to say, we have been focusing our efforts on resolving the outstanding issues in Brazil before moving further forward on these and some other initiatives.

Regarding financing of growth, as you saw from the cash slide, we have been doing this so far this year using our own cash resources taking advantage of our liquidity position. We have an undrawn 720 million project loan in place for Liza 1 and the 1 billion RCF is undrawn and as we get clarity regarding our client's plans on Liza 1 and Liza 2 plus other emerging growth opportunities during the second half we will optimize the overall funding arrangements.

But what we want to be very clear about is that as we reenter phase of growth, this is not going to change our approach to prioritizing the dividend and consideration of shareholder returns. Noting that the policy looks at underlying cash flow position was taken into account for future outlook for cash.

Also important to mention we will maintain discipline in bidding which includes ensuring we have liquidity to support new awards after payment of dividends. Now to the outlook for 2018.

First the backlog, so that’s as I mentioned 4% lower compared to December 2017, just over $16 billion. The reduction is largely driven by turnover during the period with some offsets from various small new orders in Turnkey.

We have not changed the assumptions on Liza 1 at this point, pending confirmation from the client regarding their plans for the future. and we have not yet included Liza 2 as the project today is still subject to final approvals.

We reconfirm the 63% average cash conversion rate for revenue remains valid for the remainder of the backlog to 2036, but noting the guidance we provided at the beginning of the year around the fact that we are starting to enter a period where we will see an increase in consumption of deferred income, leading to lower cash compared to EBITDA. This brings us finally to guidance.

So the main factor here is the change in assumption on Liza 1 we are on a 100% SBM basis on the directional all revenue and margin moves at to lease and operate phase in accordance with the effective cash flow generation. As such, the revenue we are adjusting Turnkey to around $400 million then we maintain lease and operating guidance at around 1.3 billion making the overall revenue guidance around 1.7 billion.

The underlying EBITDA, we are maintaining guidance at around 750 million, but as I mentioned earlier we now include the IFRS-16 positive impact in underlying keeping simple and ensure consistency for future periods. The positive impact here is 30 million where the amount has moved from rental cost of EBITDA to and financing costs.

Then to get the headline EBITDA for the year, you need to have the aggregate 233 million positive one-off effects from the sale Turritella and the additional Yme insurance case settlement. So that’s it for me and let me now hand back to Bruno.

Thank you, Douglas, and before we go, on the Q&A few key points. We are in a recovery market and we can see it given the number of new prospect that we can see on number of new opportunity arising.

Further to the Leniency Agreement we have Brazil, we have access to the overall market, which is good given the capacity constraints in the industry and it means also that we are going to have to be even more disciplined in selecting project going forward. We have shown some strong results for the cycle demonstrating that we are both late cycle and the early cycle player and with this good financial position we are can capitalize the growth from the industry and we are committed to our dividend policy of growing them overtime.

So, on those few key points, I propose we will turn the call for questions.

A couple of questions. And my first question is about the remarks of the Fast4Ward philosophy, what does it include for the year for the typical conversions in this industry or let’s say at SBM in the future?

And the second is on the Brazilian [legacy] (Ph) case and maybe just for - let me say the compact is there restored with MPS is there any progression to mention since last week there, that were my question for this moment? Thank you.

Let’s start with the second question with Erik, and Philippe will take the first question on Fast4Ward with regard to conversion which is an important question.

So thank you Quirijn. As we have indicated, we have reengaged with prosecutor, at the same time we have obviously informed the judge dealing with the provisional measure in light of the Improbity case of the existence of the Leniency Agreement and we have to take it from here, a bit of context is that the idea of having more authority, having a say all of it is in Improbity Law is not unique, we are not the only Company that has signed a Leniency Agreement, nor are we the only Company that needs to deal with the conflict that is potentially there, if not everybody has signed.

So we will follow up with both the prosecutor and the judge in the weeks to come and obviously we are very keen to come to a closure soonest.

Quirijn thank you for your question. Coming back on the Fast4Ward philosophy, it’s meant to tackle all size of [indiscernible] obviously, we are very glad of investments by Exxon of an extra large size when dealing [indiscernible].

Having said that on the conversion, which could be lower capacity, the Fast4Ward philosophy applies and it means we have been looking at top side design in order to optimize these designs and standardize a number of module. So whenever we are looking in that prospect, outside the one that mentioned extra launch, we had been able to demonstrating our [indiscernible] effort that the philosophy applies at large on those top side design.

And also the same principle are client in size of being involved with the clients first at once, so selecting the prospect and supply chain engagement and the utilization also.

Okay. Thank you for this moment.

Good morning and thank you for taking my questions. I just have two questions.

The first one is, if you could provide a little bit of guidance around the movements that we could expect on working capitals for the remainder of the year, and then my second question is out of the five sing that you expect of SBSO, how many of these that are you seeing coming up in Brazil?

So that’s going to take the working capital question and Philip would guide you through our view of the market.

Yes, good morning Lilly and I think on working capital, I’m not going to give the precise details. But I think directionally, what we see is that on the Turnkey side, it’s the opposite at what we saw in previous years.

So we are now beginning to see that positive working capital impact, as we start to ramp up so that something to take into consideration in your analysis and I think overall message around Turnkey is here we are now entering positive cash flow territory.

Alright, on the market, we are more positive on the market outlook that we have for year growth. We have seen increased activity over the past decade, which possibly materializing our works in the next 1.5 years and that’s how should be reading the 2019 and 2018 number meaning together.

While we didn’t provide much detail in Brazil, we expect between two to five hours until the period 2019, the market currently has four to five tenders, which we are actually currently reviewing and I want to bring to your attention that our current capacity is standing at two FPSO per year to be looked at those three year period.

Okay that’s so useful. Thank you.

Yes, a couple of questions. First, on the one claim, the additional 16 million that you received from the first half, is that purely related to the first tranche i.e.

the remaining whatever 13% or so was or does it also include part of the second tranche? And also on the Yme case, there was a verdict by the judge in the UK earlier this week.

Can you give us a bit more insights in why you were looking to have a couple of documents have being excluded from the court case? So what is in those documents?

And should we be worried about that for the future prospects of the Yme claim on tranche two and three, which is about to start in October. Second question would be on the order intake.

You had 100 million order intake. Can you give us a bit more feeling on where the order intake took place?

Is this primarily convoys? Is this installation work or Brownfield work on the existing lease FEEDs?

And then my final question would be on Brazil, just to clarify, you reached out and reconnected to the MPF, but have actual meetings already taken place or actual discussion already taken place with the MPF or is the schedules for the coming weeks? And if you already had kind of contact with the MPF, what was their initial reaction on [indiscernible] agreement that you closed with all the other party?

Thanks.

Thank you. So I’m sure Erik is going to be delighted to discuss with you about what is happening in Brazil.

And Douglas can give you a bit more favor on the order intake without going to too much detail actually.

Kevin, thank you for your question and I appreciate that everybody would like to join me in these conversations. But I would just like to remind you of the fact that the prosecutor had signed a very similar agreement before.

So without now going into detail of the discussion that we are having, I think that gives you a bit of a steer of what the discussions are about. But you also need to appreciate that in the weeks to come, obviously, we need to have these discussions without everybody sort of present in the room.

But I think, I hope of giving you an indication. Yes, we are talking and we will update the markets as soon as there is concrete and relevant outcome.

With regard to Yme and the additional settlements, we have now settlements with the overwhelming majority of the insurance and their represented from various layers. With regard to the document that we did not disclose, there was some article in Dutch press yesterday that to be honest, I probably was a bit taken by surprise, because this is a complete non-issue.

It’s a non-issue, because we have hundreds thousands of documents that we have exchanged with the insurance companies over years, you may have seen from the numbers that we have disclosed that this procedure is very labor intense. We spent tens of millions on this where there are so many documents that we have exchanged, but also expert witness reports and all the rest of it.

The only thing that is now referred to is one particular, let’s call it an interim decision in a litigation that is taking gears to various stages, where the core of it or the essence of it is that the insurance companies argued, or at least one insurance company argued, that there were too many documents to get them ready for trial in October. And we said, come on guys, you are asking for all these documents, we provide them and let us remind you that the [indiscernible] there is really jus the few of those are actually legally privileged.

And just said let's go on to trial forward and for the sake of speed, let's not argue to the technical details of the legal matter, but the documents are too protected by privilege. We listed the privilege but it’s a complete non-issue.

Maybe a follow-up on the statement you made about one that you said you have a deal with the overwhelming majority of all the insurance companies and it relates to the varies tranches, but the 60 million is a very small amount and if you now include settlements over tranche number two and three given the overall size of the price being whatever 700 million or so. So how should I read into that?

Well we don’t follow at best qualifications to number as a 16 million a lot of money, another lot of money, we would rather look at this a bit in the round where we say we have a very difficult project and we started to look at the insurance cover after that project the bleeding of it was growth to an end and it turned out to be one of the most sizeable insurance claim in the loan of market. We have now a growth recovery of over 300 million it's 340 million growth we need to share, after taking into account all of the cost and these are very significant numbers and then we share the proceeds with [Revsol] (Ph).

So of the 60 million is actually a growth of 50 million that we have received and maybe I mean again we don’t qualify numbers as high or low, but we would say that 50 million is a relevant number, but then lead after the cost that we need to incur today to that point 60 million is now reported. It's still a small group of insurers that went through rather trial potentially then also settle with us, in the weeks to come we will see whether they will still like to come to the settlement with us if and when we will launch the numbers with the market and if not we will go to trial in October and that's basically it.

Okay. So than maybe to take the other point, I think and also just to add relative to Yme, so as we said the 60 million is net of legal cost that’s the constant approach that we have taken so in the underlying numbers we also have the recovery of those legal costs.

And on the backlog, I think you pretty much hit the headlines already it's a number of things, so we are some small [Indiscernible] awards plus feeds and then some pick-up I think as I mentioned in off shore contracting.

Well thanks.

Good morning. Once again on Yme what is the amount left to take.

What is well obviously the subject of that court case, the amount that are still being a debate there. Secondly on Turnkey, very good results what is the effect of project close outs and is that anything larger than last year and then on the two units in the quarter and deepen outcome, you will inform us of the status of those two projects?

On Yme, we don't go into the details of what is still outstanding, but with the overwhelming majority of insurers having settled, I think that is an indication of what is still to come. The outcome again can be very different depending on trial which is a bit of an all or nothing at all, or a settlements where we agree to cease fire and call it a day.

We will update you if and when more become known.

So on [indiscernible] there was various options at the end of the contract. N'kossa contract is due to be ended sometime in November.

The two options were between the mobilization and the potential sell of the asset to the current operator. It seems to be adding on time for our sale.

I would call [indiscernible] material effect to the group result. As far as Deep Panuke is concerned, we have received the notification of the end of production while we continue to maintain the facility, we are looking at its future, but that would not imply any change in the financial profile as currently contracted within [indiscernible].

And then just to cover the close out question relative to last year. So I think the impact is a little bit more than we saw in the period last year.

But in the same range.

One follow-up on the margins and lease. I think you argued last time that because of the contract structures, the margins would be below the 63% for the time being.

We are announcing a number that's higher. How should we look at that?

And what is the feeling about those margins going forward? Do you still feel that 2018 will be lower?

Or that will be postponed to 2019 or 2020 or so?

Yes, so thanks for the question, so we have 65% headline, but I think we are now entering that period as I mentioned where we have the differed income impact. I will help you out for the first half as you can see in the balance sheet in the interims that we published.

There is an 11 million impact on the differed income and we would see a similar amount for the second half. So that’s how you can look at it.

Then of course at the end of the year it could be some working capital impact in terms of timing of payments but yes that’s the story.

Will that be prolonged in 2019 or 2020? Or should this already returned to 65-plus?

No, I mean what we guided before and at the beginning of the year that actually we will see a dip for a few years before it recovers. And we gave you some ranges of numbers in the financials at the year and to help you with that.

Okay. Thanks.

A couple of questions if I may. Firstly, just on the floating LNG, obviously during the phase for New Age.

Can you just talk about possibilities of follow-on from that and the sort of timeframe we are looking at it given, it seems to be a pretty accelerated project. And second Douglas you mentioned in your commentary you will maintain discipline in bidding.

I’m assuming that’s around your financial constraints and not the wider market. So can you tell us about what you are seeing out there is a competitive nature on these new bids are coming through?

I mean if we look at discipline, here we are looking at the number of things, its suitable as you can see the market, the FPSO market is linked to the fact of delivering on time early and accelerating the delivery. Now when you are engaged with some clients, some clients understand that and you can really have some meaningful discussion about how to secure project how to work together, and how to make a difference to their bottom line into our bottom line, and that’s the type of project we are looking at.

We shall basically base more under a discussion and a negotiation rather than the traditional approach that the industry has seen and we [shall fail] (Ph). So that’s what the part that we are looking at and the way we want to switch our business going forward.

I mean as you can see getting one year earlier in the delivery could lead to a value which is probable the value of the contract of the FPSO. So that's what we are looking at selling.

Now, Philippe do you want to comment more on New Age?

Yes, Mick thank you for your question. To give a bit of granularity on this opportunity and what it could bring in the mid-term.

We are talking about the facility which would be producing LNG, LPG as the member [indiscernible]. So we are talking about 1.2 million ton product of LNG and overall if you combined it will be two [LTPA] (Ph) facility equivalent.

We believe there is a sweet spot for these kind of capacity so this tend to be economical against other on shore prospects. If you look at the New Age portfolio it includes as well present in other countries and so that’s not on the Cameron, this is Congo as well, so this could be possibility for a second facility if we are able to launch the first one.

I want to flag one thing as well, because Bruno mentioned that we are partnering with an engineering company. This is a company where we had long-term relationship and in fact we have already developed LPG and as we have been a leader in [indiscernible] so they are bringing two companies that are extremely experienced and hopefully we believe that we can bring the new product that’s where I want to come back on the first one.

One of the opportunities which is in some valuation and hopefully using the first field [indiscernible] second one. Now those projects needs finance and I think it’s too early today to say we can say to give you a final date and we are still working with the customer in order to develop that financing.

Okay. Thank you very much.

Hi everybody good morning. I just have one question on the guidance.

So we see 427 million EBITDA underlying in the first half of year for recent upgrade, if we assume that the second half won’t deviate too much from this number and Turnkey would then be breakeven, could the 750 million of EBITDA guidance possibly be seen as being a bit conservative. Additionally the Turnkey backlog for the second half of year is 200 million and if for the full-year it’s going to be a breakeven is there a reason for it being negative in the second half?

Yes thanks Cédric. I think on the recent operating EBITDA for the first half there are some phasing impact, so as I remember things in that, to mention a few from insurance recoveries that we have got and then we got the impact from vessels leaving the fleet.

So Turritella and Yetagun, so that it is based on that the overall 750 million is reasonable. Than on the backlog, there is a [indiscernible] impact there to mentioned, so you take them into account.

Alright, great. Thank you very much.

Good morning. I have a question regarding the discussions with the Liza 1.

Last year as we saw that the Shell already bought the vessel and now you are in discussions with Liza 1 as well. Is there a shift from lease to ownership?

Yes, it’s actually an interesting question. What we are seeing insight we are seeing a shift from Turnkey to build on and transfer.

More and more clients are realizing that having only a Turnkey project, with our ability to put in production the equipment and basically realizing the equipment over a period of time, is not the way to go. So we will see more transfer from the Turnkey to build own and transfer rather than the change in mix between what is used to be traditionally in Turnkey and [indiscernible].

Our belief is that, overtime we are still going to see the same mix that we have seen over the past 20 years in the industry over 50% Turnkey deal on an transfer type of project and 50% is on operating project.

And how does that effect your financing?

I mean so, we have always have stated in previous cycle that for us the best portfolio would be to rather mix of project, 50% in the operating and 50% in Turnkey. So it doesn’t reach into financing, it’s just put us in a position where end of the deal own and transfer were basically no need to have long-term financing, we can finance these on the short-term, even the in a neutral type of financing situation, which really allow us to finance quite easily is the reason for this activity.

Another question on Brazil. Your are still in discussions with MPF.

I wondered you took a provision for settlements. Has this MPF thing is already provision for this?

Or is there much left.

[indiscernible] good morning Eric here. There is no provision for the MPF.

Okay. Another question on your tendering capacity, did I understood correctly that you aim for two FPSO next year.

No, what Philippe, said is that we have a capacity as a company to take two new award of FPSO per year. So this real cycle is what you see a portfolio of six FPSO.

Now one of the things which these doesn’t take into consideration, is the productivity improvement, we expect to see in the Fast4Ward program which could increase our capacity without increasing our fix costs structure, but it’s still too early to put any numbers on this.

And how big is the market?

The market you saw, there is a slide where you can see the number of FPSO coming to the market.

Okay. Thank you.

Good morning. Well I think all the questions have been answered, also the questions I had.

Just one additional question maybe. Do you think since the market is really booming, or at least from what I understand, do you have enough capacity to - I mean can you meet demand?

The question is not can we meet demand. This is not the right question.

The question is, can we select the project under which we can use our capacity to the best ability to create value to our clients who are going to engage with us to create value for shareholders, and all the stakeholder of company. That’s the right question.

And yes, today we have this capacity to answer what we want to answer.

Okay. Thanks.

Last question.

Yes good morning again. I was wondering given the fact that you already kind of won Liza 2, which is what the first Fast4Ward hull is going to be earmarked for.

Given you are kind of bullish outlook on the industry and the domestic number of projects in the market, why haven’t you ordered a second and the third hull yet? And when, which you kind of the ordering one in terms of your visibility?

Thanks.

That’s a good question. Philip, do you want to take this one?

Wim, thank for the question. So [indiscernible] in Phase I.

We are rightfully used our point out, are located the first hull for Liza 2. And the [indiscernible] phase is not yet confirm and if you look at the slides, you will see that we are anticipating that in 2019.

We balanced [indiscernible] well and carefully monitor opportunities phasing in the market and as the market visibility improves, we will reassess an extra order or not. To give you granularity, we would expect this new order to be placed around the end of the year of 2019.

Thank you.

Okay. So this concludes our call.

Obviously, if you have any follow-up questions, don’t hesitate to follow-up with the team. We thank you for attending.

Just few key points as a reminder, we are in a growing market. We have access to the overall market for the Leniency Agreement and our strong financial through the cycle and over the past [indiscernible].

Sorry, they are allowing us to basically grow the Company and to keep going with our dividend policy. So thank you for your attention and we wish you a good day and you can now resume a normal activity.

Thank you.