Overview of the Offshore Supply Vessel Industry

May 2012

Contents
Macro Drivers to Offshore Support Vessel Demand Growth Offshore Support Vessel Industry - Overview
Fleet Development and Age Profile Orderbook and Deliveries Demolition (Scrapping) Asset Values OSV to Rig ratio

Regional Outlook
US GoM Latin America West Africa Middle East North Sea Asia Pacific

Market Outlook Disclaimer

1

Offshore Support Vessel Demand - Macro Drivers

Macro Drivers prompting Offshore Support Vessel Demand

Oil Consumption vs. GDP Growth
% growth
6% 5% 3% 2% 0% -2% -3%

WTI Crude Oil Prices

US$ /bbl
160 140 120 100 80 60 40

2005

2006

2007

2008

2009

2010

2011

2012E

2013E

20

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

GDP Growth

Oil Demand Growth

Source: IMF, World Economic Outlook (Aprill 2012)

Source: Bloomberg, EIA - Short Term Energy Outlook (March 2012)

High Energy demand & Oil prices

High E&P Capex

Increasing Offshore activity as onshore fields mature

Robust OSV Demand

Jan-13
3

E&P Spend by Major Oil and Gas Companies

Top 10 Global E&P Spenders
US$ million
5,000 25,000 45,000 65,000

Petrochina

Exxon Mobil Royal Dutch/Shell Chevron Corp.

Top 10 E&P spenders globally accounted for nearly 44% of the total E&P spending in 2011 All of them are expected to increase capex during 2012, by an average 29%
2012E

Petrobras

BP plc

Pemex

Eni Spa

ConocoPhillips

Petronas

2011

4
Source: Company filings, Clarkson Capital Markets

Offshore fields to provide increasing share in the global oil supply

Global Offshore E&P Capex
US$ billion
214 195 173 154 140 113 90 137 137
Shallow water CAPEX Deepwater CAPEX

2011E

85%

15%

155

2014E

78%
2005 2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E

22%

Shallow water CAPEX Deepwater CAPEX

Exploration trend shifting towards offshore oil fields and away from onshore fields: Offshore oil production contribution expected to grow ~37% by 2018, up from 35% in 2010, driven by contribution from deepwater (water depths >= 600 feet)
5
Source: Clarkson Capital Markets, Douglas Westwood, The World Deepwater Market Report 2011-2015 (May 2011)

Deepwater Capex to reach new highs - fuelling the demand for OSVs
Deepwater Capex by Component
US$ billion
70 60 50 40 30 20 10 0 2006 SURF Pipelines 2007 2008 2009 2010 2011E 2012E 2013E 2014E 2015E Subsea Production Drilling Subsea Processing Floating Platf orm
Major proportion constituted by drilling activity

Golden Triangle

Majority of Capex is directed towards Deepwater Activities: Global Deepwater Capex is forecasted to reach $62 billion by 2015 from ~$22 billion in 2010, indicating a CAGR of ~23%, driven by advancement in seismic and drilling technologies Deepwater activity is mainly carried out in the Golden Triangle - West Africa, the US GoM and Brazil
6
Source: Douglas Westwood, The World Deepwater Market Report 2011-2015 (May 2011)

Exploration Trend - Deeper and Deeper

Number of Offshore Fields 10 25 30 7 8 18 7 14 16 7 39 181 Average Water Depth (feet) 4,970 4,751 3,514 2,054 1,171 761 499 361 230 226 666 1,896 Distance from Shore (km) 156 173 156 63 99 141 149 122 100 38 83 126

Country

Angola U.S. Brazil Nigeria Malaysia Norway Australia United Kingdom India China P.R. Others Total

Majority of the offshore activity is concentrated in the deepwater regions such as: Angola, U.S., Brazil, Nigeria, Malaysia and Norway

7
Source: Clarkson Research, The Offshore Oil Market (March 2012)

Significant Hydrocarbon Discoveries in the Deepwater Regions

US GoM: Big Foot, Water depth 5,330 ft, Chevron, Jack/St. Malo, Water depth 7,042 ft, Chevron Lucius, Water depth 7,168 ft, Anadarko Greater Chinook Area, Water Depth 8,877 ft, Petrobras Gunnison, Water Depth 3,138 ft, Anadarko Auger, Water Depth 2,878 ft, Marathon Oil Europe - North Sea: Greater Norne Area, Water Depth 1,254 ft, Statoil Knarr (Jordbaer), Water Depth 1,320 ft, BG Esperanza, Water Depth 297 ft, BG Erne, Water Depth 5,562 ft, Antrim Ettrick, Water Depth 363 ft, Nexen Asia Pacific: Gajah Baru, Water Depth 271 ft, Premier Oil Chim Sao, Water Depth 380 ft, Premier Oil Benjarong, Water Depth 10,626 ft, Coastal Energy Laverda, Water Depth 2,640 ft, Woodside Janglau, Water Depth 10,761 ft, Lundin

South America: Marlim Leste, Water depth 6,336 ft, Petrobas Barracuda, Water depth 3,630 ft, Petrobas Tupi, Water Depth 7,161 ft, Petrobas Guara Sul, Water Depth 7,065 ft, Petrobas Espadarte, Water Depth 2,805 ft, Petrobas Zaedyus, Water Depth 6,758 ft, Shell Albacora Leste, Water depth 200 ft, BPZ Energy

Africa: Makore, Water Depth 4,646 ft, Kosmos Energy Ten Cluster, Water Depth 3,788 ft, Tullow Narina, Water Depth 3,772 ft, African Petroleum Corp. Independence discovery , Water Depth N/A, Vanco Jupiter, Water Depth 21,335 ft, Anadarko Azul, Water Depth 3,046 ft, Maersk Oil

Offshore Oil Field:- Prospects, Discoveries (Drilled/Appraised), Under Development Fields (2011 April 2012)
8
Source: SubseaIQ (division of Rigzone), Hornbeck Offshore Investor Presentation (March 2012), Clarkson Capital Markets

Offshore Support Vessel Industry - Overview

OSV fleet growing, and growing younger

Fleet Development, by number of vessels
3,700

At March-end 2012, the total count of OSV

2,900 2,100 1,300 500 763 798 832 892 1,026 1,075 1,344 1,155 1,259

fleet stood at 2,967 vessels compared to 2,830 at December-end 2011 Young Fleet: Approx. 70% of the existing fleet is under 20 years of age

969

1,755 1,864 1,927 1,952 1,409 1,609 1,239 939 1,014 1,118
2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E

AHTS
Source: MarineBase, Clarkson Capital Markets estimates

PSV

Age Profile, by number of vessels, At March-end 2012

1,600 1,400 1,200 1,000 800 600 400 200 0 0-5 6-10 11-15 16-20 21-25 26-30 31-35 36-39 40+ 517 257 57 65 423 182 161 21
2,115 vessels <= 20 yrs.

Under 20 years Fleet, by vessel type, At March-end 2012

1,200 1,000 800 600 400 200 0 0-5 6-10 AHTS 11-15 PSV 16-20
10

1,284

842

442 275 242 122 135 24 33

Source: MarineBase, Clarkson Capital Markets estimates

Source: MarineBase, Clarkson Capital Markets estimates

as healthy orderbook promises future fleet growth

Annual Orderbook, by number of vessels, At March-end 2012
250 200 123 150 100 50 0 2012E AHTS
Source: MarineBase, Clarkson Capital Markets estimates

Global OSV orderbook comprised over 14% of the fleet at March-end 2012
105 107 61 2013E PSV

Amongst yards, Sinopacific holds the top

48 19 2014E

position with 12% share, or 48 newbuilds on order placed by Bourbon and Deep Sea Supply, followed by ABG shipyard with 5% share

Global Orderbook, by Yards, At March-end 2012

100% = 411 vessels
12% 74% 5% 3% 3% 2% Sinopacif ic Eastern Shipbuilding Remontowa ABG Shipyard Bharati Others

Annual Deliveries, by number of vessels

450 360 270 180 62 90 112 0 2007 2008 AHTS
Source: MarineBase, Clarkson Capital Markets estimates

93 97 209 128 2009

87 70 198 146 2011

11

2010 PSV

Source: MarineBase, Clarkson Capital Markets estimates

and high scrapping reduces average fleet age

Offshore Fleet - Demolition, by number of vessels
40 35 30 25 20 15 10 15 5 0 3 2005 2006 1 2007 5 2008 2009 2010 34 19 11 6 2011 2012E 2013E 2014E 20 31
1 5 2011 2 9 2012E 5 23 15 2013E 2014E 8
Demolitions to increase in the coming years

AHTS Demolition

PSV Demolition

Historically, the OSV sector has witnessed low scrapping, except for 2009 where the demolitions touched a record high with 34 vessels Over the forecast period, we expect the demolitions to increase, driven by: NOCs demand for younger vessels for long-term charters Competition from higher specifications vessels
12
Source: Clarksons, MarineBase, Clarkson Capital Markets estimates

Asset values strengthened for newbuilds and modern 5-year old units
Small AHTS (80t BP) Values
US$ million
$30 $20 $10 $0
Median
Newbuild(NB): $16.9 5yr-old: $15.4 10yr-old: $10.0 20yr-old: $5.3

Medium AHTS (120t BP) Values

US$ million
$45 $30 $15 $0
Median
Newbuild(NB): $30.5 5yr-old: $27.4 10yr-old: $14.8 20yr-old: $9.5 $31.8 $26.8 $15.0 $ 8.3

$18.0 $15.8 $10.0 $ 5.0

Oct-09

Oct-09

Jul-11

May-10

May-10

Jan-08

Dec-10

Jan-08

Aug-08

Aug-08

NB

5-yr-old

10-yr-old

20-yr-old

NB

5-yr-old

10-yr-old

In 1Q 2010, the asset values strengthened for newbuilds and modern 5-year old units, while a contrary trend was observed for the 10 and 20 year old vessels The 10 and 20 year old vessel values have either trended downwards and stayed nearly flat, indicating reduced relative demand for older vessels

Dec-10

Mar-09

Mar-09

20-yr-old

Jul-11

13
Source: Clarksons

 in contrast to a decline witnessed for their older counterparts

Large AHTS (200t BP) Values
US$ million
$95 $70 $45 $20
Median
Newbuild(NB): $62.6 5yr-old: $56.4 10yr-old: $38.0 20yr-old: $27.0

Medium PSV (3,200t dwt) Values

US$ million $45
$30 $15 $0
Median
Newbuild(NB): $27.3 5yr-old: $25.0 10yr-old: 20yr-old: $14.0 $9.9 $29.3 $24.9 $13.5 $ 8.3

$64.0 $56.0 $38.0 $ 27.0

Oct-09

May-10

Jan-08

Aug-08

Oct-09

May-10

Jan-08

Aug-08

Dec-10

Mar-09

NB

5-yr-old

10-yr-old

20-yr-old

NB

5-yr-old

10-yr-old

Very Large AHTS (240t BP) Values

US$ million
$150 $100 $50 $0
Median
Newbuild(NB): $84.8 5yr-old: $78.1

Large PSV (4,000t dwt) Values

US$ million
$75 $50 $25 $0
Median
Newbuild(NB): $44.0 5yr-old: $37.0 10yr-old: $24.2 20yr-old: $12.5

Dec-10

Mar-09

Jul-11

20-yr-old

Jul-11
$45.8 $35.0 $23.0 $ 8.8

$91.3 $79.0

Oct-09

May-10

Jan-08

Aug-08

Dec-10

Jul-11

Oct-09

May-10

Jan-08

Aug-08

NB
Source: Clarksons

5-yr-old

NB

5-yr-old

10-yr-old

Dec-10

Mar-09

Mar-09

20-yr-old
14

Jul-11

Market expected to turn in favor of vessel owners

OSV to Rig Ratio
4.5x

CCM OSV Index(1) vs. WTI Crude Oil Prices

Indexed Price 160 140
Correlation = 0.94x , R-Squared = 0.84x

4.0x

120 100 80

3.5x

60 40 20

3.0x

Mar 2012

2Q 2012

3Q 2012

4Q 2012

1Q 2013

2Q 2013

3Q 2013

4Q 2013

1Q2014

2Q2014

3Q2014

4Q2014

Apr-10

Oct-10

Apr-11

Oct-11

Jan-10

Jan-11

CCM OSV Index (31.2%)

Source: ODS-Petrodata, Clarkson Capital Markets estimates

WTI Crude Oil Index (31.3%)

Source: Bloomberg; Clarkson Capital Markets 1. CCM OSV index comprising of the four companies under our coverage Tidewater, Gulfmark Offshore Inc. Bourbon and Hornbeck Offshore

OSV to Rig ratio is expected to fall below 3.9 by 2014 from 4.1 as of March 2012, reflecting a tilt in market balance in favor of vessel owners

Jan-12

Apr-12
15

Jul-10

Jul-11

Regional Markets

16

US GoM is the most actively explored

Leading Vessel Operators

Potential deepwater discoveries (Jack/St. Malo and the Big Foot) would continue to drive E&P
13% 66% 4% 6% 6% 5%

activity in the region Top 5 Operators: Shell, BP, Chevron, Apache and Anadarko

Shell Apache

BP plc Anadarko

Chevron Others

Leading Managers: The contracting side is more top heavy with Seacor Marine and Edison Chouest constituting maximum share

Leading AHTS Players

Leading PSV Players

13% 29% 13% 3% 7% 35%

52%

15% 11% 9% 6% 7%

Seacor Marine Harvey Gulf

Source: MarineBase

Edison Chouest KG Of f shore

Tidewater Others

Edison Chouest Tidewater

Abdon Callais Odyssea

Hornbeck Others
17

 and drilled offshore basins

Utilization - AHTS and PSV
100% 80% 60% 40% 20%

Utilization: Utilization for AHTS remained volatile while that of PSV has increased Dayrates: AHTS rates are highest in the region. The AHTS dayrates improved strongly in 3Q 2011, and maintained those levels thereafter. However, an opposite trend was
1Q 2007 1Q 2008 1Q 2009 1Q 2010 1Q 2011 1Q 2012

visible in the PSV rates which declined post 3Q 2011. For 2012, the OSV average dayrates would probably down

AHTS

PSV

AHTS Average earned Dayrates

$90,000 $70,000 $50,000 $30,000 $10,000

PSV Average earned Dayrates

$18,000 $16,000 $14,000 $12,000 $10,000

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2012

1Q 2012
18

Source: Clarksons

Latin America is one of the important OSV markets

Leading Vessel Operators

Continued development of Brazils large

64%

offshore basins like the Campos, Santos, Espirito de Santos, and prospects like the Atlantic Margins, to support the OSV demand

13% 2% 2%2%

17%

Top 5 Operators: Petrobras, Pemex, BP, OGX and Shell

OGX Shell Others

Petrobras

Pemex

BP plc

Leading Managers: Tidewater, Maersk Supply and Edison Chouest

Leading AHTS Players Leading PSV Players

15% 61% 4% 3% 10% 7% 78%

8% 5% 4% 3% 2%

Tidewater Deep Sea

Source: MarineBase

Maersk Supply Bourbon

Edison Chouest Others

Edison Chouest CBO

Tidewater Bourbon

Hornbeck Others
19

 given its huge growth potential over the next 10 years

Utilization - AHTS and PSV
100% 80% 60% 40%

Utilization: The utilization levels in the region have remained fairly consistent Dayrates: Tend to be higher in Brazil relative to Mexico, as it is more expensive to work in Brazil. Overall, the dayrates have shown a

20%

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2012

gradual improvement over the last few years and are expected to maintain the trend in 2012

AHTS

PSV

AHTS Average earned Dayrates

$35,000 $30,000 $16,000 $25,000 $20,000 $15,000 $10,000 $14,000 $12,000 $10,000 $18,000

PSV Average earned Dayrates

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2012

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2012
20

Source: Clarksons

West African region is both a shallow

Leading Vessel Operators

The incremental demand for OSV activity is

19% 16% 37% 14% 6% 8%

likely to come from deepwater projects in Angola, Nigeria and Ghana Top 5 Operators: Total, Chevron, ExxonMobil, ENI and Perenco
ExxonMobil Others

Total S.A. Eni

Chevron Perenco

Leading Managers: The vessels market is top heavy, with Tidewater, Bourbon and Sanko Line forming ~16 - 36% share of the market

Leading AHTS Players

Leading PSV Players

20% 45% 7% 16% 8% 4% 10% 81% 6% 1% 1% 1%

Tidewater Swire Pacif ic

Source: MarineBase

Bourbon Maersk Supply

Sanko Line Others

Tidewater Swire Pacif ic

Bourbon Edison Chouest

Sanko Line Others

21

 and deepwater play

Utilization - AHTS and PSV
100% 80%

Utilization: The AHTS and PSV utilization in the region has declined gradually from high levels.

60%

Dayrates: The AHTS dayrates have nearly

40%

halved over the last two years. In contrast, the

20%

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2012

average dayrates earned by PSV stabilized after declining sharply

AHTS

PSV

AHTS Average earned Dayrates

$35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $30,000 $26,000 $22,000 $18,000 $14,000 $10,000

PSV Average earned Dayrates

1Q 2009

1Q 2007

1Q 2008

1Q 2010

1Q 2011

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2012

1Q 2012
22

Source: Clarksons

Middle East region is primarily

Leading Vessel Operators

In the region, the jack up rig count is a more important driver of OSV activity and demand
25% 58% 4% 5% 4% 4%

Top 5 Operators: Saudi Aramco, Iranian Offshore, Maersk, Qatar and Belayim Leading Managers: In the AHTS market,

Saudi Aramco Maersk Belayim Petroleum

Iranian Of f shore Qatar Petroleum Others

Zamil and Tidewater hold the majority share while the PSV market is significantly

fragmented
Leading AHTS Players Leading PSV Players

10% 68% 9% 5% 4% 4% 94%

2% 2% 1% 0.5% 0.5%

Zamil Co. Whitesea Shipping Halul Of f shore

Source: MarineBase

Tidewater Topaz Marine Others

Tidewater Zakher Marine

Topaz Marine Intermarine

Halul Of f shore Others

23

 a shallow water play

Utilization - AHTS and PSV
100% 80% 60%

Utilization:

Both

the

PSV

and

AHTS

utilization levels have decreased gradually from high levels over the last few years Dayrates: Rates in this region are among the

40% 20%

lowest in the world, due to shallow waters in

1Q 2007 1Q 2008 1Q 2009 1Q 2010 1Q 2011 1Q 2012

the region and Saudi Aramcos ability to dictate pricing

AHTS

PSV

AHTS Average earned Dayrates

$10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000

PSV Average earned Dayrates

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2012

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2012
24

Source: Clarksons

North Sea is one of the oldest and most explored offshore...

Leading Vessel Operators

Application
14% 65% 8% 5% 4% 4%

of

enhanced

oil

recovery

techniques is expected to drive future demand for OSVs in the region Top 5 Operators: Statoil, BP, Peterson, ConocoPhilips and Shell
Statoil ConocoPhillips BP plc Shell Peterson Others

Leading Managers: Gulf Offshore, a subsidiary of Gulfmark, Simon Offshore and Siem Offshore

Leading AHTS Players

Leading PSV Players

7% 71% 6% 6% 5% 5% 78% 9% 4% 3% 3% 3%

Simon Mokster Solstad

Source: MarineBase

Siem Of f shore Havila

Maersk Supply Others

Gulf Of f shore Havila

Simon Mokster Rem Maritime

Island Of f shore Others

25

 oil and gas basins

Utilization - AHTS and PSV
100% 80%

Utilization: The AHTS and PSV utilization levels have remained volatile over the last few years

60%

Dayrates: While the average dayrates earned

40% 20%

by AHTS have relatively subdued, the PSV dayrates have displayed consistency
1Q 2007 1Q 2008 1Q 2009 1Q 2010 1Q 2011 1Q 2012

AHTS

PSV

AHTS Average earned Dayrates

$40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000
$28,000 $25,000 $22,000 $19,000 $16,000 $13,000 $10,000

PSV Average earned Dayrates

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2012

1Q 2012
26

Source: Clarksons

Asia Pacific region offshore production has witnessed rapid

Leading Vessel Operators

Offshore
14% 66% 9% 6% 3% 2%

production

in

the

region

has

witnessed rapid growth over the years, driven by a wide array of geographic developments Top 5 Operators: CNOOC, Petronas, Chevron, PTT and Vietsovpetro
CNOOC Chevron Vietsovpetro Petronas Carigali PTT Others

Leading

Managers:

China

Oilfield

and

Tidewater hold the majority share of the AHTS market ,while the PSV market is fragmented

Leading AHTS Players

Leading PSV Players

7% 75% 6% 4% 4% 4% 94%

2% 1% 1% 1% 1%

China Oilf ield Yantai Salvage

Source: MarineBase

Tidewater Pacif ic Richf ield

Swire Pacif ic Others

Tidewater Bourbon

Farstad Swire Pacif ic

China Oilf ield Others

27

 growth over the years

Utilization - AHTS and PSV
100% 80%

Utilization: The AHTS and PSV utilization have declined from moderately high levels and stayed broadly flat over 2011. However, over

60% 40% 20%

the next 12 months rates are expected to remain stable or tread downwards
1Q 2007 1Q 2008 1Q 2009 1Q 2010 1Q 2011 1Q 2012

Dayrates: Post 1Q 2011, the average dayrates have declined, however, for 2012 they are projected to continue sideways to down
PSV Average earned Dayrates
$18,000 $16,000 $14,000

AHTS

PSV

AHTS Average earned Dayrates

$30,000 $26,000 $22,000 $18,000 $14,000 $10,000

$12,000 $10,000

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2007

1Q 2008

1Q 2009

1Q 2010

1Q 2011

1Q 2012

1Q 2012
28

Source: Clarksons

Market Outlook

29

AHTS: Strong outlook for 2012

AHTS- Global Supply Growth % Demand Growth % Utilization 2009 1,409 2010 1,609 14% 1,128 2% 70% 2011 1,755 9% 1,297 15% 74% 2012E 1,864 6% 1,586 22% 85% 2013E 1,927 3% 1,624 2% 84%

1,098

78%

AHTS Global Demand and Utilization

1,800 1,600 1,400 1,200 1,000 800 2009 2010 2011 2012E 2013E AHTS Demand Utilization 1,297 1,098 1,128 50% 78% 74% 70% 70% 1,586 1,624 60% 85% 84% 90% 80%

We anticipate the AHTS market to tighten in favor of vessels in 2012

OUTLOOK

Utilization is expected to reach peak levels from 2009-10

30
Source: MarineBase, Clarkson Capital Markets estimates

PSV: Robust in 2012

PSV- Global Supply Growth % Demand Growth % Utilization 2009 969 2010 1,026 7% 721 4% 70% 2011 1,075 5% 776 8% 72% 2012E 1,155 7% 898 10% 78% 2013E 1,259 9% 937 6% 74%

703

73%

PSV Global Demand and Utilization

1,000 73% 900 800 898 700 703 600 2009 2010 2011 2012E 2013E PSV Demand Utilization 721 776 937 60% 70% 72% 70% 78% 74% 80%

Utilization to mount in 2012 , however, the PSV

OUTLOOK

market

is

expected

to

come under supply side pressure in 2013

50%

31
Source: MarineBase, Clarkson Capital Markets estimates

THANK YOU

32

DISCLAIMER
This Investment Research is prepared by and/or disseminated by Clarkson Capital Markets (CCM). CCM is the trading name of CIS Capital Markets LLC a member of FINRA and SIPC and/or Clarkson Investment Services Limited authorized and regulated by the Financial Services Authority and/or Clarkson Investment Services (DIFC) Limited authorized by the Dubai Financial Services Authority. CIS Capital Markets LLC (CCM or the Firm) does and seeks to do business with companies covered in its research reports. As a result investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. The analyst(s) producing this Investment Research acknowledges that the views, analysis and estimates expressed in this research are the opinion of the research analyst(s) writing the report (or the research department), and may not be reflective of the opinion of the CCM or any of its associated non-research personnel. PLEASE READ THE IMPORTANT DISCLOSURES AND ANALYST CERTIFICATION INFORMATION AT THE END OF THIS REPORT General disclosures in addition to specific disclosures required by certain jurisdictions CCMs ultimate parent is Clarkson PLC (London Stock Exchange; ticker CKN:L), a Public Limited Company registered in England and Wales and domiciled in the UK. Clarkson PLC was founded in 1852 and is the worlds leading integrated shipping services group, operating from 29 offices located in 17 countries on five continents. As a result of its pre-eminent position within the shipping industry, the group has an established course of dealing, stretching in some cases over many decades, with key participants in the industry. Clarkson PLC is principally an investment holding company, whose subsidiaries are primarily involved in providing shipping related services. As a result, although Clarkson PLC, or its affiliated entities, may have concluded transactions for products or services other than investment banking services from the subject company in the past 12 months, no employee of Clarkson PLC, or its affiliates, has the ability to influence the substance of the reports prepared by CCM.

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DISCLAIMER
IMPORTANT DISCLOSURES ON SUBJECT COMPANIES As of the end of the last calendar quarter, Clarkson is not a beneficial owner of more than 1% of any class of equity for any company covered in this report. In the next [12] months, Clarkson expects to receive or does intend to seek compensation for investment banking services from entities mentioned in this report. In the past [12] months, Clarkson may have received compensation for products and services other than investment banking services from entities mentioned in this report. Within the last 12 months, Clarkson has either provided or currently is providing non-investment banking, securities related services to and/or in the past has entered into an agreement to provide services or currently has a client related relationship with the companies covered in this report.

Analyst as Officer or Director: Clarkson has internal policies that prohibit its analysts, persons reporting to analysts or members of their households from serving as an officer, director, advisory board member or employee of any company in the analysts area of coverage. GENERAL This report is not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject CCM and affiliates to any registration or licensing requirement within such jurisdictions. All material presented in this report, unless specifically indicated otherwise, is under copyright to Clarkson.

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DISCLAIMER
In this disclaimer, "connected person" means, in relation to a member of CCM its shareholders directors, officers, employees and agents, its holding company, the shareholders, subsidiaries and subsidiary undertakings of its holding company and the respective directors, officers, employees and agents of each of them. This disclaimer is governed under English law and any dispute under or in connection with it shall be subject to the exclusive jurisdiction of English Courts. United Kingdom and MiFID passport jurisdictions: Distribution of this material in the UK is governed by the FSA Rules. This Report is intended only for distribution to Professional Clients and Eligible Counterparties (as defined under the rules of the FSA) and is not directed at Retail Clients (as defined under the rules of the FSA). Investment research produced by a third party and distributed to recipients in the MiFID passport jurisdictions has been identified as investment research produced by that third party and has been approved by CISL. United States of America: Distribution of this Material in the United States or to US persons is intended to be solely for major institutional investors as defined in Rule 15a-6(a)(2) under the US Securities Act of 1934. All US persons that receive this document by their acceptance thereof represent and agree that they are a major institutional investor and understand the risks involved in executing transactions in securities. Any US recipient of this Material wanting additional information or to effect any transaction in any security of financial instrument mentioned herein, must do so by contacting a registered representative of Clarkson Capital Markets, a FINRA registered broker dealer at 212.314.0900 or 713.235.7484. Investing in non-U.S. securities: Investing in non-U.S. securities may entail certain risks. The securities of non-U.S. issuers may not be registered with, nor be subject to the reporting requirements of the U.S. Securities and Exchange Commission. There may be limited information available on foreign securities. Offshore companies are generally not subject to uniform audit and reporting standards, practices and requirements comparable to those in the U.S. Securities of some foreign companies may be less liquid and their prices more volatile than securities of comparable US entities. In addition, exchange rate movements may have an adverse effect on the value of an investment in a foreign security and its corresponding dividend payment for U.S. investors. Net dividends to ADRs, if applicable are estimated, using withholding tax rates conventions, deemed accurate, but investors are urged to consult their tax advisor for exact dividend computations. Investors who have received this report from a member of Clarkson may be prohibited in certain states or other jurisdictions from purchasing securities mentioned in this report from a member of Clarkson. This Report may discuss numerous securities, some of which may not be qualified for sale in certain states and may therefore not be offered to investors in such states. This document should not be construed as providing investment services. Investing in non-U.S. securities including ADRs involves significant risks such as fluctuation of exchange rates that may have adverse effects on the value or price of income derived from the security. Securities of some foreign companies may be less liquid and prices more volatile than securities of U.S. companies. Securities of non-U.S. issuers may not be registered with or subject to Securities and Exchange Commission reporting requirements; therefore, information regarding such issuers may be limited. United Arab Emirates and applicable Middle East jurisdictions: Distribution of this material is governed by the DFSA rules. This information is intended for Professional Clients and market counterparties only and should not be relied upon by, retail clients. Clarkson Investment Services (DIFC) Limited has not been a party to or had any material input towards this Report. Clarkson Investment Services (DIFC) Limited aims to be transparent, fair in business dealings and adhere to DFSA conflicts of interest requirements.

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