Okay. Good morning, everyone. Welcome to BW Offshore's third quarter presentation for 2021. The plan was that there would be two of us today to present. I have to apologize on behalf of our CEO, Marco Beenen, who unfortunately fell ill with a flu yesterday and today has no voice. You have to bear with me for the whole presentation. Please note our disclaimer. Okay, moving to highlights. We're pleased to see that we are on track when it comes to progress on the Barossa project. We continue to push forward on placing procurement contracts, locking in kind of prices in a relatively volatile market.
Post-quarter, we carried out a block sale of part of our shareholding in BW Energy. We sold 20 million shares in the market with the intention that we will free up some liquidity for future growth opportunities. We continue to pay cash dividend as previous quarters with $0.035, all to be paid in Q4. Financially, we deliver an EBITDA of $97 million in the quarter, which is slight improvement from quarter two, and on the back of relatively strong and steady performance from the fleet. Operating cash flow was $157 million, of which $72 million are related to prepayments under the charter for the Barossa FPSO contract.
Overall, as of the end of Q3, we have received $133 million of prepayments related to that same contract. Going to operations. Starting with fleet performance and HSEQ. As you can see, fleet uptime dropped to 91.6% in Q3. This was the result of the shutdown we had on Espoir for the period of August and September in the quarter, as we were doing repairs on the tanks post the accident we had in earlier 2021. Although the unit is now back in operation again and was back in operation in October. On HSE, we had one reported LTI in Q3, but we had zero HPIs.
HPIs, or high potential incidents, are kind of our main tracker when it comes to how we're doing sort of safety-wise, as that really tracks the high potential incidents. With zero HPIs, we're pleased with that. COVID management, as we're operating with quite a few units in West Africa, we still struggle a bit with quarantine regulations and also to get vaccination of crew up to the necessary levels. We do see that we continue to drag on with approximately $5 million kind of quarterly cost related to this as part of our financials. For unit update, BW Catcher continued to operate well. Commercial uptime 100% in the quarter.
We also finalized an agreement with Harbour Energy around tuning of the commercial uptime, which gave us an additional contribution of $6 million for Q3. Particularly positive to see that Harbour has now approved a 3-well drilling program for 2022, showing that they're willing to invest further into the field, which bodes for optimism on our side when it comes to future extensions of that contract. BW Adolo, we saw that BW Energy completed their tie-ins for the final two wells, from 4 to 6, and now have six wells kind of on stream related to that unit.
They are looking to optimize production further and have decided to add a new gas lift compressor to provide additional gas lift and increase the flow from the wells, which has been ordered and expected to be delivered and installed later part of next year, as I understand. When it comes to Sendje Berge, we have finally, I would say, been able to agree on an extension for this contract. We have extended with one more year on mutual terms. This has to a certain extent also affected the work on the tank inspections for that unit and when we could plan to be complete with this and be back into operation.
Currently, as we're trending right now, we have a planned startup for February next year. On Espoir, as I mentioned earlier, we did restart operations and the unit is now in operation and has been so since October. From this slide, you see four of our core units which represent 95% of our backlog. These are the backbone of the business when we look forward. We have Adolo, Catcher and Pioneer, and the new Barossa FPSO contract.
When you look at the macro environment with oil prices kind of trending flat around $80 and the outlook on oil being a bit more optimistic than it has been compared to some time back, we are also relatively positive to the fact that there could be extensions on Catcher and Pioneer further down the line, as they are the first one that would end the firm period in 2025. Moving to the rest of the fleet. As we see it today, when we say maximizing value from the remaining units, we are then focusing on where it make economic sense, we will continue to work on extensions with our clients and extend contracts.
Although this could also mean that we try to find solutions where we divest some of these assets. As we are really moving on a strategy where we want to focus on long-term infrastructure energy, we will be more sort of forward-leaning to also divestment as a way of liquidating these assets that we have. We have also now kind of narrowed it down in terms of which candidates are really redeployment candidates of the fleet of units which are off contract today. It is two candidates predominantly. It's Polvo, which has been confirmed to be a good candidate, and we are in active dialogue with BW Energy for redeployment of that unit. It's BW Opportunity, which we're gonna...
Where we're gonna finish up the repairs we've been doing by mid next year. This means that for Athena, Cidade de São Vicente and Umuroa we will now progress towards recycling for these three units. We will take quotes, we will move ahead, and we expect to be able to conclude on recycling on these units over the next six to 12 months. Moving on to the Barossa project. As I said in the beginning, we are pleased to report that we are tracking well on schedule for this project. As you can see from the slide, detail engineering for the hull is really progressed at 90%, and we're also progressing really well on topside detail engineering.
We have almost completed 3D model review for the hull, and we have started and we're working on the 3D model review for turret mooring and as well as top side. We have started fabrication of the hull, which we reported earlier, and now also on the turret. As we did for the hull, we're now planning for an early steel cut also on the top side ahead of schedule. It just manifests that we're focusing on the schedule. We're quite confident when it comes to overall schedule and progress so far. The challenging side of this is that we're in a market where we see there's pressure on the supply chain.
We do see that there are cost creeps or inflation when it comes to materials. There's no doubt we have also been impacted by this as we've been pushing ahead to lock in contracts. With the way we have set up the project, we have quite a robust contingency for the project, and we have additional margins. We have been able to lock in prices so far and absorb this cost inflation well within the budget that we have and the contingency we have in place. Moving to finance. As I said earlier, EBITDA of $97 million, sort of a slight improvement from quarter two. Predominantly driven by a few things.
The agreement related to Catcher and commercial uptime, as I mentioned, earlier. We also got our final milestone related to Umuroa. We have now gas-free the unit, so it is ready for recycling. This was the final milestone in the agreement with the New Zealand authorities, when it came to decommissioning of that unit out of New Zealand. That gave another $6 million, which was booked in quarter three. This has, of course, been somewhat countered by Espoir being shut down for majority of the quarter, and left us with an EBITDA of, as I said, $97 million. Going to the income statement, no need to comment on the things I've talked about already. As you see, depreciation relatively flat quarter-over-quarter.
EBIT was $28.3 million in quarter three. Interest expenses trending as expected, with very few kind of changes from quarter-on-quarter. Fluctuations on financial instruments driven by a kind of swap rates trading, trending down, so we have some non-cash mark-to-market losses on our hedges. The one that's worth mentioning here is that when it comes to equity-accounted investments, which are BW Energy, we booked a loss of $3.8 million in the quarter. They didn't have any liftings in quarter three. This was as planned. They had two liftings in quarter two and planned for lifting again in quarter four.
As the company had no lifting, we had to take our share of the results, which was a loss of $3.8 million. With that included in taxes, we ended the quarter with a profit of $5.2 million. Looking at cash flow, some of this has been mentioned already. Operating cash flow was $157 million in quarter three, of which $72 million was prepayments of the Barossa sort of contract charter rate. We did invest $73 million in the fleet in quarter three. $59 million of this is related to Barossa. It shows with the prepayment structure we have arranged, we have been fully funded so far with those for construction costs.
So far, we haven't had any need to add any equity or debt to support progress on the project. We continued to pay installments on our facilities, and we drew some on the Catcher and the Petróleo Nautipa facilities, and we drew some on the corporate facility to carry that. When it comes to net interest payments and lease liabilities, this is slightly higher than normal. This is coming from the fact that we consolidate the business of BW Ideol.
They paid for a right, well, they have acquired an exclusive right of use of port in the U.K., which gives them access to future construction of their substructures, and they paid about $8 million for that. This is included in our cash flow, but not coming out of cash from BW Offshore. If you... The other items are self-explanatory. When you remove the cash of $45 million that BW Ideol had by end of Q3, we had $199 million in cash by end of the quarter. Barossa has three sort of funding streams.
We wanted to give a bit more flavor on this project as we have gotten quite a few questions over the last few months on how it's structured, both to help investors and analysts to understand how it's structured. The prepayments are one of these funding streams. The way it works is that there's $1 billion of this charter rate for the Barossa contract that will be paid during the construction period. This consists of, you know, a payment which is linked to progress on the project as well as certain milestones.
As of end of quarter three, we have been paid $133 million, and as of, well, basically last week, we have invoiced for a total of $187 million, which is equivalent to about 19% of the total prepayments. Bear in mind, this is based on approved and agreed upon progress with the client. As I mentioned, the prepayment is one of these funding streams. The other two are equity into the project from BW Offshore and our partners, and the third one is external debt, as you can see. When it comes to the equity and the debt, this will be drawn pro rata as need be for the project.
As I mentioned earlier, we haven't drawn anything, neither equity or debt by the end of the quarter. Our first draw on the external debt was in October, and the same cash and the pro rata cash call on equity was done in October. An element maybe worth mentioning on the model is that, AssetCo, as you can see here, which will be the owner of the FPSO when the charter starts after construction, where we are in a consortium with Macquarie and ITOCHU, will be the owner of the asset for the first 15 years for the fixed term of the contract.
Beyond the fixed term, ownership transfers back to BW Offshore, and BW Offshore will alone reap the benefits or the economic benefits of any value of future extensions beyond the first 15 years. We are sharing the economic benefits for the first 15 years, but we will be the one taking 100% of this beyond the fixed period.
You can also see here on the left-hand side in the column, which kind of indicates it's not an accurate measure as such, but the way we built up the structure, and it goes back to what I said about the Barossa project, that we have kind of built this project, or we're doing this project on the basis of an estimated cost, and we have both contingency in there for unknowns like market inflation, but we also have an EPC margin. We have, I would say, a very comfortable buffer, which we can use to kind of counter any inflation or cost increase as you should see as you progress on the project. Going to the balance sheet, we're continuing to repay on debt.
As I mentioned earlier, we had a net debt of $807 million in quarter three. The equity ratio, as you can see, is trending flat at relatively comfortable levels of 39%. The key for us is that, I'm coming back to it, we still see a market where project opportunities are there, very good project opportunities. We will continue to cautiously manage our balance sheet to enable us to take opportunities down the line. Similarly, when you look at our installment profile, we have no major debt maturities near term. We do have a capital markets debt, which is falling due in late 2023 and into 2024.
The main objective for us is that as we are venturing into large-scale projects, which ties up quite a lot of kind of project liquidity, we will be actively looking at how we can address these maturities early, both for the sake of that, but also to make sure we have a balance sheet that enables us to take on growth opportunities when they arise. I think some of these things have been mentioned already, so I'm not gonna go into detail. I just wanna say when it comes to Barossa and the financing, we have now been able to complete that fully within quarter three. Draw down, as mentioned on equity and debt, was done after the quarter.
We have also swapped 75% of the exposure to LIBOR throughout the project phase and which will be increased to 100% post-construction. That was locked in at about 1.87%. On the liquidity side, as I mentioned, with projects ongoing and potential opportunities in the pipeline, we need ample liquidity and working capital available. I just want to start with the one at the bottom there, which is the block sale of BW Energy. You know, as I mentioned earlier, we are seeing a market where opportunities are there. We decided to move ahead with selling part of our block in BW Energy, sold 20 million shares, raising $67 million.
As we think this is part of an enabler for us to do new products in the future. On CapEx for the remaining fleet, just wanna point out that we are still kind of trending at $25 million for the full- year. No changes to what we have been guiding on throughout the year. Overall, we have a liquidity of just over $300 million at end of Q3. This is not including the new financing for Barossa. We continue to be focused on shareholder returns. You know, with the outlook we have, we are paying dividends as before.
Has no immediate intention to make any changes to that. At the same time, as we are very focused on growth opportunities, both on the FPSO side, but also within the energy transition, predominantly then together with BW Ideol. Moving to strategic investment update. Leaning a little bit into what I've said, we do see that there's still a window of opportunity there for new projects. This picture is showing FPSO awards, 21, 22, so it's relatively narrow picture. But does show quite a few prospects, in particular in West Africa.
We do think that these opportunities, if you also, if you go beyond 2022, the markets for us will predominantly be Brazil, West Africa, and to a certain extent, Australia, as we can see it. If you look at the macro picture, it does look quite conducive at the moment. Oil price is kind of trending around $80. Gives us an optimism that, well, we will see both extensions, but maybe even more importantly, that projects will go ahead and be sanctioned. We do see oil majors moving more towards a lease and operate model as opposed to an EPC model, which they were normally pursuing in the past for these large scale FPSO projects. Seems to be they're really rethinking their capital allocation in the energy transition.
That brings up what we see as a more attractive market to us than what we have seen in the past. At the same time, we see that lenders and equity sponsors are extremely focused on which projects they're interested in. Really only the top-tier projects are attracting capital. We see a lot of interest for the right opportunities, and it's a bit of a binary market. That goes for lenders, but it also goes for equity sponsors. That being said, we will continue to be quite selective on which project opportunities we are moving ahead on. We need to see similar returns as we are seeing for Barossa, which means long-term fixed contracts. Projects driven by majors or very strong counterparties.
Also projects where we see not only you can bring in partnership equity as a sponsor, but also where you can both de-risk and bring opportunities through that we can work with partners also on the construction side. Which also is another enabler where we can take our model from Barossa maybe one step further. We see an opportunity where we can work with partners also on construction, which can further kind of enable a bit of Offshore's ability to have also capacity to grow on and take large-scale projects. The FPSO infrastructure projects is one side of it. We do follow a two-leg strategy. We continue to position ourselves for growth in the energy transition.
We have established ourselves within offshore floating wind with the investment we have made through BW Ideol. We are actively working with them on developing the floating offshore wind pipeline. Separately, we also have a cooperation with a U.S. utility company called Invenergy, where we have jointly bid for Scotland acreage. It doesn't stop there. More on the exploration, in an exploration phase at the moment, we are also looking at how kind of further down the line we can use our competence within the FPSO space, combine it with competence on floating wind to develop other similar type of offshore low-carbon energy solutions.
Just a few words on the BW Ideol and an update on them. I think for a more in-depth update, you can look at their presentation, their Q3, which was made a few days ago. Two things to mention. One is that we think that they're making the right move by having accessed or ensured access to a port in the U.K., where they now can set up for, you know, as I said, scaling up of construction of their substructures. BW Ideol is building their platform on building the substructures in concrete and having access to build these concrete floaters on a larger scale.
We believe will be quite important in terms of their ability to scale up the business in the future. Think that this will serve both them for their own projects, as well as projects where BW Ideol is participating as an EPCI provider. Another positive event in the quarter was the partnership with EDF and Maple Power, where they are now one of 10 joint ventures which have been approved by the French government to tender for acreage in South Brittany. This is only their second tender. Moving on to BW Energy, which is also releasing update to the market today.
I think what's worth mentioning from BW Offshore's side is that we're happy to see that they've completed the final well tie-in for Tortue, which includes increases the flow to BW Adolo and increases the tariff we earn from the FPSO, and also to see that they're on track with Hibiscus/Ruche for connecting that one up late next year. Morondava is on track. As I mentioned, we are actively working now with BW Energy on how Polvo can be redeployed for that project. Yeah, maybe one word around the block sale. I already mentioned that we raised $67 million through that block sale.
I think an important aspect for us is that we don't see the percentage shareholding as that important when it comes to strategic rationale on the collaboration we have with BW Energy. We will continue to work together on opportunities where we can redeploy our assets despite having reduced our shareholding. This block sale does not affect that strategic rationale at all. That brings me to the summary and outlook. We are fully focused on the Barossa project. It's our largest project to date. Tracking well on that one, and we will continue to focus and make sure that execution of the project happens safely. As I mentioned, we are now moving ahead on the remaining non-core fleet.
We will be in particular moving ahead with recycling of units where we do not see an outlook. At the same time as we are progressing on new FPSO project opportunities, and we do, as I mentioned, see some interesting prospects in the pipeline. That brings me to the end and Q&A.
Are there any questions from the live audience? Okay, we do have some questions coming in from the webcast audience. How do you see the market for redeployment? How many new redeployment contracts do you expect to be awarded in the next 12-18 months?
I think that question is linked to how many can we do? To be frank, every redeployment needs financing. I think our view on the market has changed quite a bit over the last two years. We were initially very positive to this. As I mentioned, when it comes to FPSO projects, we do see kind of a binary change in the market when it comes to access to financing, lenders being much more cautious to only support the top tier projects. Same with equity sponsors, which makes it more challenging. On our side, we see that window to be relatively limited.
We have singled out two units which we are focusing on at the moment for redeployment. Polvo, which has hopefully a future home in Brazil, and then it's BW Opportunity. Do I think more than one will be redeployed over the last 12 months? Probably not.
Thank you. How do you see that high order books at the shipyards and increased raw material prices will affect further developments of the FPSO market? How do you see that this will affect redeployment?
The high order book, and I presume it's capacity constraints that's being referred to. Well, it obviously affects the market because with capacity constraints comes challenges because an FPSO project is driven by schedule. Schedule is important. You agree upon the schedule when you agree on a contract with a client. You need to ensure that you have access to capacity to be able to perform the project within an anticipated timeline. Meaning if capacity or activity is going up, you need to be more cautious in terms of new projects you take on. Another concern is of course price inflation as a result of it. We still see that the market...
Well, I can't predict the future. It's very difficult to say whether this is something that's gonna normalize. We do see that others are having challenges with yards due to COVID. COVID still, especially in Asia, is a factor that affects how efficient the yards are. We think that's hopefully more of a temporary impact on their capacity and that further down the line, this capacity will be freed up. We do see on the prospects that we are working on, we do see that there are yards that have the capacity to take on this.
Thank you. Does BW Offshore have any contracts that have directly exposed to the oil price? And if so, which FPSOs does this apply to? And how much does this amount to?
We have a couple of contracts which has a limited link to oil price. It's linked to those fleets which are considered non-core and has a very limited impact on our overall earnings. We have very little exposure directly to oil price.
As you see it today, will BW Offshore need debt financing before 2024?
If BW Offshore need new-
Debt refinancing.
Debt refinancing. No, we shouldn't need that. We have capital markets debt that, well, we have capital markets debt bond that will fall due in late 2023. We have our corporate facility as well as our convertible bond, which is maturing in 2024. Technically, yes. You will have to refinance the bond in 2023 latest, yeah. Yeah.
With today's low share price, would it not be better to allocate the $25 million paid in cash dividend to repurchase shares?
Well, this is a discussion we have with our board on a regular basis. We will at the moment continue with cash dividends. We think it's the right way to move forward. We never rule out any changes to this in the future.
A few questions on Barossa. Would you be able to comment on the percentage of the Barossa construction budget that is most exposed to cost inflation driven by high energy and commodity prices?
I probably can't give a very accurate percentage of what is affected. It's affected. The fact is that quite a large part of the project budget is related to its commodities, its materials. That, you know, projects are broken down. You have an element of engineering, and you have lots of materials. The hull is steel. Topside is steel. We do have large exposure to materials cost and cost inflation. That was also why I mentioned earlier, we have been, you know, very focused on locking in contracts. We are focused on the schedule. We try to lock in contracts with suppliers early on the basis that only when you lock in the price with them can you really lock in the price and reduce our exposure.
Sometimes with speed, you have to pay up a bit to ensure it happens, but at least you de-risk the project as you go. I'm not sure if that completely answered his questions, but I can't give an exact percentage of the allocation, more broadly how we manage the risk.
We have a few more. Could you please quantify roughly how much of the contingency on Barossa that has been spent?
I don't wanna give exact numbers. What I want to say is that we have very solid buffers on that project. We are very comfortable where we are today in terms of, you know, overall buffers for the project and where we are.
Thank you. The oil market has got better, but the company seems to have given up on finding redeployment opportunities for more than the two units after paying to keep a large number of units stacked for some time. Could you please explain?
Well, it's been a process. If you kind of look back in time, take Umuroa as a unit, it is not that long ago since we actually got the unit out of New Zealand. These are offshore units which are connected to a field. You need to move them from the field, you need to clear regulatory things, and then you can move ahead with recycling. There are just certain kind of, how you say, things in the system which requires time to be able to move ahead with recycling. I think on most of our units, I think we have been moving ahead as quickly as we think would be sensible to do. That's why I tried to clarify today.
We have really now narrowed it down, and we're gonna move ahead with recycling on three of our units, you know, which are now ready for recycling as fast as we can. I think we should be able to execute this over next six to 12 months.
Thank you very much. That was the last question from the webcast audience. I give the word back to you.
Okay. Thank you. If there's no further questions from the audience, we will leave it with that and say thank you.