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Global Industries, Ltd. Peter S. Atkinson President Global Industries, Ltd. Peter S. Atkinson President IPAA New York April 19th, 2004 IPAA New York April.

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Presentation on theme: "Global Industries, Ltd. Peter S. Atkinson President Global Industries, Ltd. Peter S. Atkinson President IPAA New York April 19th, 2004 IPAA New York April."— Presentation transcript:

1 Global Industries, Ltd. Peter S. Atkinson President Global Industries, Ltd. Peter S. Atkinson President IPAA New York April 19th, 2004 IPAA New York April 19th, 2004

2 Safe Harbor Statement “This presentation contains statements that are not historical facts and such statements are “forward-looking statements” within the meaning of section 27A of the U.S. Securities act of 1933 and section 21E of the U.S. Securities exchange act of These forward-looking statements reflect the company’s current intentions, plans, assumptions and beliefs about future events and financial performance and are subject to risks, uncertainties and other factors, many of which are outside the company’s control. A discussion of these factors is included in the company’s periodic reports filed with the U.S. Securities and exchange commission. In light of the risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur at that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. We undertake no obligation to update or revise our forward-looking statements because of new information, future events or any other reason. This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy or an attempt to influence any voting of securities, by any person.”

3 Agenda l Assets & Facilities l Customers & Competitors l Industry Overview l Project Execution l Mexico Outlook l Going Forward l Questions and Answers

4 Assets & Facilities

5 In the Beginning, 1973 l Price per gallon of gas = $.40 l Price per MCF natural gas = $.22 l Global gross revenues = $200,000 l Net Earnings = {$40,000} l Vessels Owned = 0 l Total Employees = 2 Divers: Byron Gray, Roland Bouchard l Total Yard Personnel = 1: Joe Thornton l Total Office Personnel = 1: Kathryn Legendre l Company Vehicles = 1: Truck l Age of Owner = 30 years old l Office Building = Trailer

6 Present Day, 2004 l Global gross revenues = $500 M l Vessels Owned = 68 l Total Employees = 2,000 l Office Building = 15 Locations

7 Carlyss Houston New Iberia Nigeria Angola Ghana India Sharjah China Thailand Singapore Indonesia Brunei Malaysia Australia GOM Inter/Deep Latin America/Mexico West Africa Asia Pacific GOM Inter/Deepwater5 vessels Latin America/Mexico 2 vessels Mediterranean2 vessels West Africa 3 vessels Asia Pacific 3 vessels Total15 vessels * Excludes liftboats, DSV, OSV, cargo/launch barges and crew boats * Includes MSV Pioneer Worldwide Operations in 27 Countries Major Combination Derrick/Pipelay Barges China

8 Two Operating Segments Global Industries LTD Offshore Construction Division (OCD) Offshore Construction Division (OCD) Global Divers & Marine Contractors (GDMC) Global Divers & Marine Contractors (GDMC)

9 Worldwide l Subsea completions l Wet and hyperbaric welding Technology and Experience l Saturation diving to 1,500 feet l Nuclear power plant maintenance Global Divers Marine Contractors Diving Services

10 Gulf of Mexico (22) l Abandonment support l Diving support l Water depths up to 180 feet l Installation/repair l Pipeline installation Gulf of Mexico (22) l Abandonment support l Diving support l Water depths up to 180 feet l Installation/repair l Pipeline installation Global Divers Marine Contractors Liftboat Services

11 Pipeliner 5 Length: 180 ft. Sea Constructor Length: 250 ft. Global Divers Marine Contractors Coastal Vessels

12 Offshore Construction Division l Deepwater Projects l Large Diameter Pipelines l Salvage Projects

13 Hercules Length: 513 ft. Lift (tons): 2000 Offshore Construction Division (OCD) Hercules

14 Titan 2 Length: 457 ft. Lift (tons): 880 Offshore Construction Division (OCD) Titan 2

15 Comanche Length: 400 ft. Lift (tons): 1,000 s.t. Cheyenne Length: 350 ft. Lift (tons): 800 s.t. Navajo Length: 240 ft. Lift (tons): 150 s.t. West Africa OCD Vessels

16 Iroquois Length: 400 ft. Lift (tons): 250 s.t. Tonkawa Length: 250 ft. Lift (tons): 175 s.t. Mediterranean & Middle East OCD Vessels

17 DLB 332 Length: 352 ft. Lift (tons): 750 s.t. DLB 264 Length: 400 ft. Lift (tons): 1,100 s.t. Seminole Length: 424 ft. Lift (tons): 800 s.t. Asia Pacific OCD Vessels

18 Customers & Competitors

19 Traditional Customers

20 Russian companies Full IOC access NOC (no equity access) NOC (equity access ) Source: PFC Upstream Competition Service & BP; reserve figures are conventional billion boe, / 7% 113 / 6% 324 / 17% 1,354 / 70% Growing Significance of National Oil Co. (NOC’s) RESERVES

21 Competitors

22 Industry Overview Industry Overview

23 Industry Considerations — l Over capacity m Industry continued to maintain construction fleet despite soft market m Extremely competitive industry; driving down margins and driving up project risk l Very poor results m Under-bidding m First-of-kind development (high-risk) m Poor execution m Onerous Terms: EPIC fixed-price contracts l Risks were rising, not falling m Larger, deeper, more complex projects m Project insurance difficult to obtain/expensive m Variation orders, litigation, receivable claims and collection difficulties m Consistent delays for deepwater projects despite increase in number of projects

24 Industry Considerations — The Good News l Several new management teams m Improving coordination, best practices m Refusal of onerous contract terms m Drive towards teaming on projects l Deepwater projects only delayed, not canceled (1) m 150 deepwater field developments (twice the previous five years) for $58 billion (+125%) m 116 floating productions systems (60% more than previous five years) for $32 billion (+87%) m 51,000 km offshore pipeline installations for $54 billion (+30%); 30% will be deepwater with international markets leading the way l The sector has learned its lessons m Poised for better margins and improved contract terms due to increased bidding discipline, better projects execution and improving market conditions 1. Douglas – Westwood ltd., Infield Systems Ltd.

25 Project Execution Project Execution

26 Project Execution Shifted focus from EPIC projects to primarily pipeline projects -- being more selective Non-performers have been replaced Project teams are being strengthened Recent addition of a Commercial Manager to support change order and claim management with clients and subcontractors On-line reporting systems are now fully operable

27 Operations Planning and Execution (OPE) l Worldwide Resource Planning (Quarterly) l Regional Planning (Monthly) l Project Level Planning (Weekly) l Competitors Barge Schedule Commitments (as information is received) l Project Personnel Assignments (Upon Award/As Revised)

28 Project Controls

29 Global Website Projects Project Updates for Clients singpem Global Website

30 Barge Global Office Laptop Desktop Customer PDA VSAT Communication

31 Global Sky - Internal Improves administrative efficiency allowing Barge Superintendent to focus on work in progress. Gives us data from which we can create various analyses Provides Vessel Activity and daily productivity reports. Reports online replacing ship to shore fax and communications.

32 Combines Estimating and Project Management Processes. An online review Application.

33 Bidding Process

34 Estimating Organization Estimating Manager Asia Pacific Bangkok, Thailand Estimating Manager Gulf of Mexico Carlyss, LA Estimating Manager Mexico Ciud Del Carmen, MX Estimating Manager Coastal New Iberia, LA Area VP Asia Pacific Area VP GOM Area VP Mexico President GDMC Director, EPMS ME,WA,SA Houston, TX CORPORATE

35 Bid Approval Authority by Price Estimating Policies and Procedures

36 Monte Carlo Risk Analysis on major projects. Commercial and third party risks. Cash flow analysis to obtain positive or neutral cash flow. Cost Probability Finish Date Maximum Cost: $1,669,703 Latest Date: 01Apr 04 Expected Cost: $1,461,709 Expected Date: 20Mar04 Minimum Cost: $1,257,345 Earliest Date: 01Mar04 Target Cost: $1,416,475 Target Date: 16Mar04 Risk Evaluation

37 Management Review Process

38 Regional Presence Equipment & Availability Risk Profile Competitive Rating Competitor Analysis

39 Global Star - COO Page Mexico - 3 Pipeline Repair Project

40 7-Jan-049-Jan Jan Jan-0415-Jan-0417-Jan-0419-Jan-0421-Jan-0423-Jan-0425-Jan-0427-Jan-0429-Jan-0431-Jan-04 2-Feb-044-Feb-046-Feb-048-Feb Feb-0412-Feb-0414-Feb-0416-Feb-0418-Feb-0420-Feb-0422-Feb-0424-Feb-0426-Feb-0428-Feb-04 1-Mar-043-Mar-045-Mar-047-Mar-049-Mar Mar Mar-0415-Mar-04 PEMEX 18 mile 24” Pipeline DLB Shawnee

41 Productivity Bonus Program Update 2004 ChickasawW&T Offshore4” and 6” P/LPaid Spool BaseW&T Offshore4” and 6” P/L Paid Welding CrewW&T Offshore4” and 6” P/L Paid Chickasaw Zia Energy 5” and 5” PIP Paid Pioneer Zia Energy 5” and 5” PIP Paid Arapaho Mariner Energy 3 Pile Project Paid Arapaho Apache Corp. Salvage 3 platforms Paid Titan Pemex 3 Pipeline Repair Paid Cherokee ATP Salvage Re-install Paid Cherokee Unocal Salvage Tripod Paid Cherokee Spinaker Compressor Install Paid Cherokee BP Rig Move H&P Paid 41

42 Mexico Outlook

43 Source: Banco de México Mexico Economic Environment $ 194$ 185$ 172$ 169IMPORTS (Billions $) N/A$ 17$ 14$ 13Petroleum $ 183$ 176$ 166$ 161Total EXPORTS (Billions $) 4.5% - 5%3.8%1.6%0.9%ECONOMIC GROWTH (Pct) PROJECTEDACTUAL

44 Source: Poder Magazine & *Pemex Pemex Statements Exchange Rate (Pesos per USD) N.A.4540 Staffs N.A Petrochemical Gas and basic Petrochemicals Refinery $10.1 Billion 2,3625,4695,542 Exploration & Production 3,3446,5996,809 Total Investments 10,62412,96316,840 Net Worth 62,95545,79243,560 Liabilities 73,57958,75560,400 Assets Balance Sheet (3,217)(3,597)(2,123) Net Income 30,97627,79730,995 Taxes $42 Billion 29,17625,15328,872 Income Before Tax 21,61921,83221,633 Operating Cost 50,79546,98650,505 Revenue Income Statement $ (Mils)

45 National oil reserves have declined at a rate of 1.8% annualy due to the lack of investment in exploration. Source: Secretaria de Energía Mexico Oil Reserves

46 Source: Secretaria de Energía Mexico Oil Daily Production mbd TotalHeavyLightSuper Light Production for 2003’ was 3,370 mmb

47 Mexico Oil Production per Region Cantarell field of the North-East Region represents 60% of National production mbd North-EastSouth-WestNorthSouth Source: Secretaria de Energía

48 Mexico Offshore Construction Activity Source: PEMEX Drilling Division NOTES: 1) Three contracted drilling platforms 2) One contracted drilling platform 3) Four contracted drilling platforms 4) A contracted riser platform Twelve platforms have been contracted and three more are in bidding process nowadays. Recover Wells Marina Noreste North Marina Suroeste Total ) 3) 4) 2) ProductionRiserTotal Region. DrillingLiving quarter Trunk Pipes Kms Type of platforms Compression Recover Wells

49 Mexico Offshore Drilling Activity Source: PEMEX Drilling Division DOS BOCAS FRONTERA CD. DEL CARMEN POZA RICA TAMPICO TUXPAN VERACRUZ Ayin-Alux Crudo Ligero Marino Ixtal-Manik Ku-Maloob-Zaap Cantarell Lankahuasa Lobina Carpa Región Norte Región Marina Noreste Región Marina Suroeste Yaxché Golfo de México New Installation Infrastructure Offshore in the Marine Zone New Installation Infrastructure Offshore in the Marine Zone

50 Mexico Pipeline Market Global Offshore Mexico Global ProjectsBid Process PIPELINES: Competitors Projects Procurement Prospective Work / February 2004' Bids in House Construction Active or ProjectStart EFMAMJJASONDEFMAMJJASONDEFMAMJJASOND Norte 24" X 25 Km LankahuasaDic-02 SOAbk8"Ø X 12.5 Kms PTB to Batab-A31-Jul-03 SOAbk24"Ø X 29 Kms Enlace to Uech-A07-Ago-03 NECantarell36"Ø X 53 Km Pol-A to PR-106-Nov-03 SOLitoral12"Ø X 5.5 Kms Manik to Ixtal06-Nov-03 SOLitoral24"Ø X 18.2 Kms Ixtal to ABK-D06-Nov-03 SOLitoral24"Ø X 17 Kms May-A to Enlace11-Nov-03 SOLitoral10"Ø X 0.3 Kms May-1 to May-A11-Nov-03 SOLitoral20"Ø X 3 Kms May-B to May-A11-Nov-03 SOLitoral16"Ø X 10.3 Kms Costero to May-B11-Nov-03 NECantarell24"Ø X 2.9 Kms Akal-MB to Akal-B18-Dic-03 NECantarell24"Ø X 1.1 Kms Akal-MB to Akal-M18-Dic-03 NECantarell12"Ø X 0.4 Kms Anillo B.N. to Akal-MB18-Dic-03 NECantarellEPC-77 (12 pipelines)15-Ene-04 SOLitoral16"Ø X 3.2 Kms Sinan-C to Sinan-D23-Mar-04 SOLitoral16"Ø X 0.7 Kms Sinan-B to L-16"23-Mar-04 SOLitoral20"Ø X 0.1 Kms Sinan-C to L-20"23-Mar-04 SOLitoral16"Ø X 0.9 Kms Sinan-A to L-16"23-Mar-04 SOLitoral16"Ø X 14 Km Yaxche-A to Puerto Ceiba23-Mar-04 SOLitoral12"Ø X 0.1 Km Bolontiku-A to L-24" X 29 Km23-Mar-04 SOLitoral16"Ø X 1.6 Km Citam-A to L-16" X 14 Km23-Mar-04 SOLitoral8"Ø X 11.5 Km Kab-101 to Enlace23-Mar-04 SOLitoral10"Ø X 21.3 Km Mison-A to Enlace23-Mar-04 SOLitoral10"Ø X 4 Km Mison-B to Line-10"Ø (Mison-A/Enl)23-Mar-04 4 Qtr.1 Qtr.2 Qtr.3 Qtr.4 Qtr.1 Qtr Qtr.3 Qtr.4 Qtr.1 Qtr.2 Qtr.3 Qtr. RegionDescription Bid

51 Global ProjectsBid Process Competitors Projects Procurement Bids in Home Construction Active or ProjectStart EFMAMJJASONDEFMAMJJASONDEFMAMJJASOND NEKu-Ma-Za24"Ø X 2.2 Kms PP-Ku-C to PP-Ku-S24-May-05 NEKu-Ma-Za12"Ø X 2.6 Kms L-20 (ZP-C/MB-A) to PP-ZP-A24-May-05 NEKu-Ma-Za12"Ø X 2.9 Kms L-20 (AK-L/Ku-A) to KU-S24-May-05 NEKu-Ma-Za12"Ø X 0.8 Kms L-20 (Ku-A/ZP-C) to PP-ZP-B24-May-05 NEKu-Ma-Za24"Ø X 1.6 Kms PP-ZP-D to PP-ZP-A24-May-05 NEKu-Ma-Za12"Ø X 4.2 Kms L-07 to PP-ZP-D24-May-05 *Total Pipelines: 4 Qtr.1 Qtr.2 Qtr.3 Qtr Qtr.2 Qtr.3 Qtr.4 Qtr.1 Qtr.2 Qtr.3 Qtr.4 Qtr. RegionDescription Bid 2003 Active Global Offshore Mexico PIPELINES: Prospective Work / February 2004' Mexico Pipeline Market

52 Going Forward

53 Strategy Maintain leadership position in mature shallow water domestic market while selectively targeting Gulf of Mexico deepwater opportunities. Pursue growth through International expansion by: l Leveraging our position in Mexico to become Pemex’s contractor of choice, l Focus on developing new markets in Mediterranean and India. l Expand our niche underwater welding technology and pipe-in-pipe expertise into India, China and other select areas. l Pursue opportunities in Brazil and deepwater West Africa. l Continue to focus on “Transportation and Installation” rather than EPIC, “turnkey” type contracting philosophies. l Divest under-performing assets and resources. l Develop our employees into the most professional, best-organized in our industry.

54 Actions Taken l We have strengthened the Organization l We have improved our reporting & Management Systems l We are just starting to see the benefits of Global Star and the barge productivity programs l Increasing Backlog

55 Improved Position l Our market does exist and is getting stronger particularly in Mexico, the Mediterranean and Offshore India l We are beginning to see a ground swell among major contractors unwilling to continue accepting the current T&C’s. l We continue to enjoy a great reputation among the London Underwriters for our contracting philosophy, employee safety and Assets preservation. l We have one of the best safety records in the industry.

56 Worldwide Projections Worldwide Projections

57 Market Conditions Annual E&P Spending Surveys l 2003 E&P spending exceeded original projections by 10%. l Worldwide E&P spending forecast to rise 4% to $145 Billion in l North American Spending to remain flat, International to increase 6%. Solomon, Smith Barney, Lehman Brothers

58 2004 Latin America $40M West Africa $95M Projects Include: Prospects & Bids  50% Project Probability $1.6 Billion Middle East India $280M MED $95M Mexico $890M GOM $270M Asia Pacific $50M Worldwide Projects - by Region Start Date 04 Source: Global Analysis

59 2005 Latin America $100M West Africa $260M Projects Include: Prospects & Bids  50% Project Probability $2.9 Billion Middle East India $110M MED $140M Mexico $990M GOM $600M Asia Pacific $700M Worldwide Projects - by Region Start Date 05 Source: Global Analysis

60 Start date: West Africa Latin America Gulf of Mexico Asia Pacific Mexico Med Middle East / India 2003 $250 M $130 M $105 M $150 M $65 M $10 M $20 M 2004 $65 M $30 M $315 M $370 M $240 M $280 M $55 M $730 M $1.4 B Total Change A 90% Increase Source: Global WW Bid Activity - by Value 2003 vs 2004

61 Forecasted Worldwide Pipelines Miles Source: Infield Systems, Global Pipeline miles 6, ,000 miles per year, for next 4 -5 years

62 Questions & Answers Questions & Answers


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