Frigstad Discoverer Invest Ltd.
September 2006
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 2
DisclaimerThis document must not be acted on or relied on by persons who are not relevant persons. Anyinvestment or investment activity to which this communication relates is available only torelevant persons and will be engaged in only with relevant persons.
This document is incomplete without reference to, and should be viewed solely in conjunctionwith, the oral briefing provided by Frigstad. The sole purpose of this document is to assist therecipient in deciding whether it wishes to proceed with a further investigation of Frigstad and itssecurities. This document is not intended to form the basis of any investment decision andshould not be considered as a recommendation by Frigstad or any Arranger or any otherperson to purchase any securities. This document does not constitute an offer to sell or aninvitation to purchase any securities.
In preparing this document Frigstad has relied upon and assumed, without independentverification, the accuracy and completeness of all information available from public sources orwhich was provided to it or otherwise reviewed by it. The information contained in thisdocument has been taken from sources deemed to be reliable. Frigstad can not represent thatsuch information is accurate or complete and it should not be relied on as such. Any opinionsexpressed herein reflect Frigstad’s judgement at this date, all of which are accordingly subjectto change. Technical details and data may in many cases be preliminary or subject to changeor received from other third party sources without verification, and should therefore not be usedfor any other purposes than mentioned in this disclaimer.
Accordingly, this information is being supplied to you for information purposes only and not forany other purpose. This communication and the information contained in it do not constitute orform any part of an offer of, or invitation or inducement to apply for, securities.
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 3
Agenda
Highlights and operational summary
Project details and market update
Financials
Outlook & Summary
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 4
Investment highlights
Rig with extreme drillingcapabilities
Controlled construction risk
Attractive slot at costconsiderably lower than mostpeers
Controlled construction cost
Conservative leverage
Strong market fundamentalsbacked by recent deepwaterfixtures
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 5
Highlights
Construction of “SS Frigstad Oslo” according to plan
Equity and convertible bond subscription completed March 2006
Agreement with Aker Kværner MH for drilling package to “SS FrigstadOslo” and other main OFE packages
• Approx. USD 30m non critical OFE to be ordered (Of total OFE ofUS$178Mill)
• Remaining contingency of USD 9.5m
Project price remains USD 489m before loan financing
Further strengthened organization
Continued strong market for drilling services
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 6
Operational update
USD 240 million equity and convertible bond funding program completed
Main Owner Furnished Equipment packages secured, including
• The integrated drilling package from Aker Kvaerner MH
• Marine Riser package, 10.000 Feet from Aker Kvaerner
• Main Deck Cranes, each 100 Ton capacity, from Liebherr
• The Blow Out Preventer (BOP) package from NOV/Shaffer
Yantai Raffles Shipyard secured Main Builder Furnished Equipmentpackages
• Main Engines, 8 each Wartsila Diesel engines
• Thrusters, 8 each LIPPS (Wartsila)
• Integrated main power package, DP3 and vessel management system fromConvert Team Ltd. (ex.Alstom).
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 7
Organisational and Management
Build-up of project organisation as planned.
Strengthened management team:
• CFO: Bjørn C Jacobsen
• CTO: Erling Knudsen
• Accounts & Admin Manager Singapore: Mrs. Jennifer Lim
Senior personnel in offices in Oslo, Kristiansand, Singapore and Yantai(China)
Hiring of key construction supervisory personnel started
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 8
Erling Knudsen
Chief Technical Officer
Mr. Knudsen has more than 25 years of offshore dril l ing and rig design experience
Extensive 2nd - 5th generation rig experience including major conversion and new-build projects onsemi-subs and dril l ships
Operational rig management experience with Statoil and Viking Rigs AS
Mr. Knudsen has been an independent consultant to the offshore dril l ing industry since 2003
Bjørn C Jacobsen
Chief Financial Officer
CFO of seismic company Exploration Resources ASA, having led a successful IPO in 2005, and heldthis position until the company was acquired by CGG
14 years of experience as oil services financial analyst
Several years as a business consultant
Mr. Jacobsen holds an MBA from the Norwegian School of Business Administration (NHH 1984) and isa Certified European Financial Analyst (CEFA)
Confidential
Harald Frigstad
Chief Executive Officer
ManagementMore than 30 years of offshore dril l ing and rig design experience of which six years as rigsuperintendent on semi-submersible dril l ing rigs
Mr. Frigstad is the founder of Frigstad Offshore Dril l ing Pte. Ltd. and has served as CEO sinceinception in 1989
From 1987 to 1989, Mr. Frigstad was co-founder of Viking Offshore Dril l ing and was responsible forupgrading and operations of two dril l ships
In 1987, Mr. Frigstad was Dril l ing Advisor on rig design for Norwegian Rig Consultants AS. From 1985to1986, Mr. Frigstad was Operations Manager for the dril lship Compass Dril ler
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 9
FRIGSTAD MANAGEMENT, Inc.
Experienced offshore drilling contractorheadquartered in Singapore.
97% controlled by Harald Frigstad
On-site building supervision of the FrigstadOslo during the construction and outfittingperiod, including construction supervisionand headquarters support
The Frigstad Management Inc. team hasconducted rig operations in South America,Asia and the Middle East since 1989
ISO 9001 certification
Frigstad Engineering (owned by HaraldFrigstad) will deliver the license for the useof the D90 DRR DP3 rig design
References – Frigstad Management, Inc.
Note: Includes rigs which the Frigstad team has managed, owned or supervised.
References
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 10
Project
The Rig – “SS Frigstad Oslo”Greatest capacity for drilling in ultra-deepwater
• Water depths up to 12,000 feet
• 50,000 feet drilling depth
• Best-in-class deck space and loadingcapacity
State-of-the-art drilling equipment
• Dual drilling capable derrick (2 x 1000 shorttons) – more powerful than any other semi-submersible
• Significantly more efficient than single derrickoperations, reduces operational time ofdrilling operations by 20-60%*
Top-class station-keeping capability (DP3and moored)
Proprietary design with superior costefficiency and performance
• Modern design, secures building efficiency
• Optimized for development drilling
Optimized for operations in 95% of theworld’s ultra- deep water areas*
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 11
Move To Deeper Waters
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 12
Information listed above is taken from various public documents and may not be confirmed to be correct by the respective rig owners or agents. Information for new construction units may also be preliminary andsubject to changes. * Auxilliary derrick on West Venture, West E-drill, Aker, Odfjell and Stena DrillMax has less capacity than main derrick. Frigstad has a full 2x1000st.Source: ODS-Petrodata, Frigstad Discoverer Invest, World Oil and Odfjell company presentation for Odfjell rig. ^Gross Tensioner capacity is in most cases referred to as the total capacity of ALL tensioners.The actual total capacity as per industry guidelines or structural design may be lower.
Rig Name
Rated
Water
Depth
[ft]
Drilling
Depth
[ft]
Variable
Deck
Load [st]
Quarters
Capacity
Liquid
Mud-
Brine
[bbls]
Bulk
Capacity
[cu ft]
Derrick
Capacity
[lbs]
Full dual
Drilling
Capable
Total
Engine
Horse-
power
Gross
Tensioner
Capacity
[lbs ]^
Cranes
Capable
to
Change
Thruster
Year
Built
DP
CapableDesign
Frigstad Oslo 12,000 50,000 9,370 160 24,892 30,000 4,000,000 Yes 59,000 4,800,000 Yes 2009 DP3 D90 Frigstad
Ranking among semis #1 #1 #2 #2 #1 #3 #1 #3 #1
Ultra deep semis in operation
GSF Development Driller I 7,500 37,500 7,716 160 19,050 27,395 2,000,000 No 40,764 3,000,000 Yes 2005 DP2 ExD
GSF Development Driller II 7,500 37,500 7,716 176 19,050 27,395 2,000,000 No 40,764 3,000,000 Yes 2005 DP2 ExD
Eirik Raude 10,000 30,000 7,717 120 10,419 27,760 2,000,000 No 60,342 1,600,000 No 2002 DP3 Bingo 9000
Leiv Eiriksson 8,200 30,000 6,889 120 10,419 27,760 1,500,000 No 61,200 1,200,000 No 2001 DP3 Bingo 9000
Deepwater Horizon 8,000 30,000 8,816 130 10,185 21,800 2,000,000 No 58,650 N.a. No 2001 DP3 RBS-8D
Cajun Express 8,500 35,000 6,615 130 4,280 23,000 1,500,000 No 40,140 1,600,000 No 2001 DP3 Express 2000
Ocean Confidence 7,500 30,000 6,615 140 10,000 30,000 2,000,000 No 55,086 N.a. No 2001 DP3 H-3.2 Enhanced
West Venture 5,905 29,527 5,512 114 15,454 33,549 1,950,000 Yes* 44,304 960,000 No 2000 DP3 ME-5000 DP
Deepwater Nautilus 8,000 30,000 10,359 130 10,185 24,508 2,000,000 No 25,870 3,198,000 No 2000 No RBS-8M
Stena Tay 8,038 30,000 6,064 130 7,900 28,900 1,500,000 No 50,403 4,260,000 No 1999 DP2 L-767C E. Pacesetter
Ultra deep semis on order
Petromena (2 rigs) 10,000 N.a. N.a. N.a. N.a. N.a. N.a. N.a. N.a. N.a. Yes 2009 DP3 ExD
West E-Drill 10,000 30,000 6,614 128 20,128 30,000 3,000,000 Yes* 43,000 4,800,000 No 2008 DP3 CS-50 MkII (N)
SeaDrill (2 rigs) 7,500 35,000 7,717 120 N.a. N.a. N.a. No N.a. N.a. Yes 2008 N.a. GVA 7500-N
Maersk (3 rigs) 10,000 N.a. N.a. 180 N.a. N.a. N.a. N.a. N.a. N.a. No 2008/09/10 N.a. DSS 21
Aker Drilling (2 rigs) 10,000 30,000 7,717 160 7,548 N.a. N.a. Yes* N.a. N.a. N.a. 2008 N.a. Aker H6
Ensco 8500 8,500 N.a. N.a. 150 N.a. N.a. 2,000,000 N.a. N.a. N.a. N.a. 2008 N.a. Ensco 8500
Odfjell 10,000 37,500 8,300 158 10,693 31,800 3,000,000 Yes* 59,000 3,200,000 N.a. 2008 DP3 GVA 7500-N-E
Ultra deep drillships on order
Mosvold Drilling (2 ships) 10,000 30,000 20,000 160 12,300 34,500 4,000,000 Yes N.a. 3,200,000 N.a. 2008/09 DP3 MOS 10000
Stena Drill Max 10,000 N.a. 16,537 180 11,322 39,000 3,200,000 Yes* 56,000 2,500,000 N.a. 2007 DP3 N.a.
Project
Technical comparison
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 13
Derricks Dual Ram Rig
50,000 ft. dril l string10,000 ft riser vertical racking capacity and2000 ft on pipe rack.
Hook Load 2x1,000 short tons
Top Drive 2x1,000 short tons
Pipehandling Drill string and riser rackingsystem
2 x Iron roughnecks
Mud Pumps 4 x 2,200 hp
BOP Stack 15k, 18 3/4”, HT, H2SFive rams, 2 annulars
Riser Tensioning In-line, total capacity 4.8 mill ion lbs. (3.2 Mill.Lbs Opr.)
Main Power 58,000 hp
Deck Cranes 2 x 100 short tons, lattice boom
1 x 25 short tons, knuckle boom
Water Depth 12,000 ft
Dril l ing Depth 50,000 ft
Accommodation 160 persons
Design and Capabilities Drilling Equipment and Systems
6th Generation D90 DRR DP3
Det Norske Veritas
Flag: Liberia
Classification
Length 110 m
Breadth 78 m
Operating Draft 23.6 m
Operating Displacement 52,741 metric tonnes
Principal Dimensions
Variable Deck Load (non Harsh) 8,500 metric tonnes
Liquid Mud / Brine 24,892 bbls
Bulk Storage 30,000 cuft
Base Oil 2,661 bbls
Dril l Water 20,457 bbls
Sack Store 8,000 sacks
Loading and Storage Capacities
“Frigstad Oslo” – Main Features
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 14
Large Capacities and Deck Areas
All anchor winchesbelow deck. Thisgives muchmore free opendeck space andmaintenance ofequipment iseasier.
Large Open Deckareas for handlingof many X-mastrees and BOP.Unobstructedaccess forassembly andmaintenance byoverhead cranes,both Port andStarboard
Large 100 ton
deck cranesP/S will handleheavy lifts suchas x-mas treesand change outof thrusters.
160 menmodern livingquarters withonly 1 or 2 mencabins, manyoffices, largefacilities.
Highest capacitydrilling facilitiesworldwide atpresent; 2 x 1000Short Tons
Large andaccessible piperack deck. Onededicated knuckleboom crane forsafe handling
Frigstad D90
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 15
Project
Yantai-Raffles Building Process
Modularised building process
World’s largest crane
Spacious dry dock
Large qualified workforce (1,400 in house employees including 250 engineers)
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 16
Risks Mitigants
Equipment price volatility
Shipyard fails to deliver
Rig build quality
Cost overruns
Fixed contract price from shipyard and for maindrilling package
Secured prices and delivery times for majority ofkey components (80-90%)
Performance Bond
Standard liquidated damages provisions
Early Completion Bonus
Frigstad holds title to rig from day one
World-class suppliers on all major equipmentand mechanical systems
Larger than normal site team supervisingconstruction and accepting rig (15-20 men)
ISO Certification Processes at FMI
Jumping principle
$9.5 million contingency built into budget
Mitigation of construction risk
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 17
Market
Recent Deepwater FixturesNew contracts for UDW units (+7,500ft) last 12 months
Source: ODS-Petrodata and Carnegie.
5/6G Fixtures
Name Owner Day rate Length (dayys) Fixture date Contract start Location Water depth Operator
Transocean drillship 3 Transocean 472,000 1,825 31/08/2006 15/03/2010GoM 12,000 Chevron
ENSCO 7500 Ensco Int. 352,000 730 17/08/2006 01/02/2008Brazil 8,000 Chevron
Stena Drill Max II Stena Drilling 517,000 1,095 14/07/2006 30/06/2008UK 7,500 Chevron
New drillship QGP 365,000 1,826 01/07/2006 01/07/2009Brazil 7,874 Petrobras
Transocean drillship 2 Transocean 475,000 1,460 22/06/2006 01/07/2009GoM 12,000 Norsk Hydro
Stena Drill Max I Stena Drilling 480,000 1,460 06/04/2006 01/01/2008GoM 7,500 Repsol
Deepwater Frontier Transocean 476,000 1,095 02/03/2006 01/12/2008 India 7,500 Reliance
GSF Development Driler III GlobalSantaFe 391,000 2,555 02/03/2006 01/02/2009n.a. n.a. n.a.
Discoverer Clear Leader Transocean 450,000 1,825 01/03/2006 01/04/2009n.a. 12,000 Chevron
Discoverer Deep Sea Transocean 485,000 730 01/03/2006 01/01/2009n.a. 10,000 Chevron
Cajun Express Transocean 460,000 913 01/03/2006 01/07/2007GoM 8,500 Chevron
Discoverer Enterprise Transocean 520,000 1,095 28/02/2006 01/12/2008GoM 10,000 BP
Deepwater Discovery Transocean 475,000 1,095 03/02/2006 01/11/2008Brasil 10,000 Devon Energ
ENSCO 8501 Transocean 331,000 1,095 19/01/2006 14/05/2009GoM 8,500 Nexen
Deepwater Nautilus Transocean 425,000 730 15/12/2005 11/12/2007GoM 8,000 Shell
Noble Danny Adkins Noble 407,000 1,461 22/11/2005 01/04/2009GoM 12,000 Shell
Discoverer Spirit Transocean 475,000 1,095 02/11/2005 06/07/2007GoM 10,000 Anadarko
Deepwater Millenium Transocean 425,000 1,095 02/11/2005 06/07/2007GoM 8,100 Anadarko
Leiv Eriksson Ocean Rig 465,000 731 24/10/2005 29/04/2007UK 8,200 Shell
Deepwater Pathfinder Transocean 395,000 800 30/09/2005 18/06/2006West Africa 7,500 Shell
Belford Dolphin Fred Olsen Energy 420,000 1,040 15/09/2005 01/01/2007US GoM 10,000 Anadarko
Leiv Eriksson Ocean Rig 450,000 910 31/08/2005 15/03/2007West Africa 8,200 Shell
CR Luigs GlobalSantaFe 392,500 730 29/07/2005 24/12/2006US GoM 10,000 BHP
Ocean Endeavour Diamond Offshore 271,000 730 27/07/2005 30/01/2007GoM 8,000 Devon Energ
Leiv Eriksson Ocean Rig 373,000 365 24/06/2005 14/03/2006West Africa 8,200 Total
Sedco Energy Transocean 175,000 70 16/06/2005 30/06/2005West Africa 7,500 Chevron
Eirik Raude Ocean Rig 405,000 730 14/06/2005 22/03/2006UK 10,000 Chevron
Deepwater Discovery Transocean 364,000 730 08/06/2005 19/07/2006West Africa 10,000 Total
Noble Dave Beard Noble 220,000 1,825 03/06/2005 15/07/2008Brazil 10,000 Petrobras
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 18
Financials
Key figures
231 924Total assets
21 568Total liabilities
-172 194Net interest-bearing debt
188 895Cash and cash equivalent at end of the period
(1 428)Net profit/(loss) for the period
(3 687)Other operating expense
2 259Interest Income
First six months 2006USD Thousand
© Frigstad Discoverer Invest Ltd. | Second Quarter Update | September 7, 06 19
Outlook and Summary
Project on Schedule
Project on Budget
Amongst the most attractiverigs for its market segment
Very strong MarketFundamentals