Okay. Welcome and good morning, everyone. Representing today our third quarter 2022 update from BW Offshore. I'm here with Ståle Andreassen, our CFO. After a couple of conference calls in the previous quarters, we choose for a bit more personal setup today in a live presentation and a webcast for those who can not participate here. Please note the disclaimer. I'll start with the highlights. I'm very pleased that I can announce an extension of the limited notice to proceed because this means that we're actually progressing towards the contract award of the Shell Gato do Mato project, and we'll elaborate more later in this update. Also, Barossa still on track, 50% complete. We're making good progress.
This quarter we will also continue with a dividend, cash dividend, and dividend in kind totaling to $11 million. Operational updates, starting straight with the Barossa project is progressing well. We're on track, 50% complete now by end of October. We deliver excellent safety performance, 6.4 million man-hours without incidents or lost time injuries. We're now in the middle of the heavy construction phase, both topsides in Singapore and the hull in Korea. 80% of the equipment packages have now been delivered to the hull yard. Like everyone else, we're maneuvering in a challenging supply chain market, and therefore it's very important that we stay close to our subcontractors and suppliers.
We're doing this together with our client to make sure that we identify any disruptions or order issues that our vendors may have that we can act promptly and adequately. That's key in maintaining the schedule in the kind of landscape that we operate in these days. That has been so far very successful. We are impacted by the inflation and also the supply chain challenges and some design growth. We guided previously. We have good project buffers, so first of all, contingency, but also our margins in the project. We're using these buffers. We're now halfway in the project.
We're still drawing from the contingencies, but we can also see that towards the end of the contract, the EPC margins will be impacted somewhat. Overall, it's a project with very sound economics and, in that sense, we're still very satisfied with the project so far. Moving on to the fleet. Good fleet performance, both safety and uptime, despite one LTI with somebody who hurts his back with some physical work, but nothing serious, fortunately. The statistics are trending stable. Uptime was good. We were above 99% this quarter. This is a weighted average of the units by revenue contribution.
That means that the units of the core fleet that are in operation, the three units in Gabon, Gulf of Mexico, and Catcher in the U.K., have delivered well. They are the main contributors to this uptime number. Together with Barossa, this part of our business, which we call the core FPSOs, define 99% of our backlog. This backlog stands now at $7.3 billion, of which 84% is firm. On Adolo, we have stable production around 10,000 barrels per day. We're waiting for the ramp up that we expect later in the quarter as BW Energy has also guided on and later in next quarter, first quarter next year.
We preparing the FPSO for the tie-in of the Hibiscus/Ruche development. Again, targeted for end of first quarter next year. Catcher lower production than normal. This was due to a planned maintenance campaign that took place in August, but otherwise very good uptime as usual. Also Pioneer stable production, good uptime, and we noted that our client is planning drilling activities in the Chinook fields, which we consider positive. The remaining fleet, what we call the non-core fleet, is now reduced to three units in operations and two units that we prepare for divestment and recycling. The divestment units are the units in West Africa for both Nigeria and Ivory Coast.
We're either divesting to our clients or to a local operator, and these discussions are ongoing. I expect and hope that this will conclude in the course of next year, probably mid-next year. Well, with that, I'm handing over to Ståle.
Good morning, everyone. I'll take you through the finance slides. I think we can start with saying that on an overall basis, we are pretty pleased with the result of the third quarter. As you can see, top line is declining somewhat, which is natural as we have now completed the handover for Yùum K náab, the lease that was with Pemex for a number of years. That's now been completed, and the unit's been handed over. We have completed the transaction where BW Okatela has now been sold to a local operator in Indonesia. On the EBITDA side, we got Sendje Berge back in operation in Q3, so the contribution from that unit has boosted our EBITDA vis-à-vis second quarter.
Although we had somewhat less contribution from Catcher as the unit was on a planned shutdown during most of August. Alluding to what Marco was saying on the units Abo, Sendje Berge, and Espoir, we are in the process where we are divesting these units. As we're now seeing that we probably won't be able to consume remaining inventory during the period where we are to all these units, we have decided to write off remaining inventory on these units. That totals about $12 million on the Q3 numbers. When you look at the underlying EBITDA, excluding impairment, we're looking at approximately $92 million for the quarter, which is an underlying result we are quite pleased with.
Income statement, not so much to elaborate on. As you see, depreciation is relatively stable quarter-on-quarter. Interest expense is also stable quarter-on-quarter. We're hedged on floating rate interest, so we don't see interest expenses fluctuating much even though the market is quite volatile. We could book a gain on financial instruments, which is driven by positive mark-to-market effects on these interest rate swaps that we have. We booked a gain on other financial instruments, which is $2.1 million, coming from reevaluation of our Norwegian kroner denominated bond loan. BW Energy reported their results yesterday. They reported a net profit of approximately $34 million for quarter three.
With our 26% ownership in the company, we could book a share of profit from that holding of $7.2 million in Q3. When you take into account tax expenses, we could deliver a net profit for the period of $29.6 million in Q3. On the cash flow side, as you can see, operating cash flow in total was $192 million for the quarter. Meaning when you exclude the prepayments from Santos, the remaining underlying fleet was delivering $103 million in the quarter. This was above our expectations initially for the quarter.
I want to also add that this was boosted additionally as we got settled all overdues, all outstanding related to the Yúum K'ak'náab contract as the unit was handed over to Pemex. We invested $218 million in the quarter. Most of it is related to Barossa, as it says on the slide. The remaining $18 million is ongoing upgrade works for Adolo, as we are now kind of finalizing the work we need to do for the tie-in for Ruche Phase 1 for BW Energy. We had some capitalized costs related to the FEED activities ongoing for the Gato do Mato project opportunity that Marco is gonna come back to later on. Remaining items on the cash flow is quite self-explanatory.
We continue to put equity into the joint venture, which will be the future owner of the Barossa FPSO. We funded in $170 million from the JV to the project company for the ongoing activities. When you exclude any consolidated cash related to BW Ideol, which we consolidate, we have a cash position of $267 million in Q3, almost in line with how we started the quarter. Looking at financing for Barossa and Ideol, it's very much business as usual. We continue to draw up pro rata on the project debt facility as well as equity. We funded in $90 million.
We drew $90 million on the project debt facility in Q3 and $22 million on a 100% basis in new equity into the JV. Santos as a client, they paid in $89 million into the project. When you look at the overall payments from Santos as opposed to the total number of an estimate of $1 billion over the project period, they had paid 44%-ish of the prepayments, which doesn't fully align with the number that Marco presented, but that is because the cut-off here is per end of September, as opposed to what he was referring to, which is more an as-is picture, where we are 50% complete.
All in all, we're well-funded on the project and the financing or the funding activity goes as normal. On the balance sheet, again the trend is the same as been for previous quarter. We continue to reduce net debt. We continue to reduce our leverage ratio. All kind of natural as we're amortizing on our debt while our cash position stays flat. The equity ratio dropped just a little bit in the quarter, and this is as expected as due to these prepayments we have for the Barossa project. You're building up a liability on the balance sheet that you will start amortizing when the unit goes into operation in 2025. We do expect to see some slow draw on the equity ratio towards 2025.
Overall when you look at our covenants, we are pretty comfortable with where we are. On the consolidated debt situation, nothing really new. It's a very slow-moving graph. I think many have seen this for many, many quarters. I will continue to say as I've mentioned in previous presentations that we will start addressing the corporate facility and the Catcher facility as well as our two bonds during the course of mid 2023. As Marco mentioned earlier, we do have very good progress now on Gato do Mato. As part of that we have kicked off the financing effort on that project, and that will be the main focus for us until the course of end of this year.
When that is closed out, we will go back to start addressing our corporate facility and the Catcher facility as I mentioned. To sum it up, we are focused on divestments on the non-core fleet. The focus is to try and free up as much liquidity we can from these units which are seen as non-core in our long-term strategy. I think we are on track on this as we are aiming to close this out by mid next year. We have a very good, I would say, liquidity situation at the moment, almost $500 million in available liquidity. We are 100% hedged on floating rate debt, so we also have very good visibility on kind of our financing cost going forward.
I would say this all transpires in us having now the ability and we have an enabler where we're able to move ahead with what we consider to be the next big large infrastructure FPSO project for BW Offshore in Gato do Mato. I think we put ourselves in a good position where we are able to financially, and I know Marco will mention this organization as well, capable of lifting such another large-scale project. On the dividends, there's not much more to add to what Marco said in the beginning. We continue to pay a cash dividend and dividend in kind through BW Energy share, same level as before.
When you calculate this, just to highlight, towards today's share price, it does imply an annual dividend return of approximately 9% overall. Yeah. We'll go to Marco for some updates on the strategy.
Yeah. Well, we mentioned Gato do Mato a couple of times, and that is indeed the exciting news. We're really progressing now towards a contract. We're targeting early February. That's why the limited notice to proceed has been extended. Of course, contract award is subject to Shell taking FID and us completing our financing package in that timeframe. In the meantime, we have agreed basically all the terms of this project in an agreed form. It also includes inflation risk of certain items where we think that we cannot take those risk, and it would result in too high contingencies in the project. Shell is taking those.
We also have firmed up our project execution plan. That includes the security of yard capacity, which is very important in this market. As Ståle mentioned, we kicked off the financing, which is a significant debt facility for such kind of project. We obtained very good interest, very encouraging interest from the potential lenders. That process is running well as well. I do think this is the most attractive FPSO project currently in the market. It's with, you know, our counterparty is Shell as operator, Shell Brasil, and then a strong partner as TotalEnergies alongside. It's an 18-year firm lease and operate contract.
Similar to Barossa and consistent with our strategy, it means we're achieving our returns during the fixed term and the seven-year options that are also there as pure upside. We don't include that in our commercial models and return estimates. It allows us to finance the equity with partners. We will have equity partners as co-owners in our asset company, same as Barossa. We're following the similar model, and this asset company will purchase the FPSO from an EPC entity. That's where it's different than Barossa because in that EPC entity, we have a joint venture with our partner Saipem for the EPCI undertaking. That's a 50/50% joint venture. The timing is also excellent.
We focus on being selective, taking the right projects. This is definitely such project. We want to target a new project every other 2 years because that times well with our project execution machine. This project comes very nicely at the tapering down of the engineering and procurement efforts of Barossa, and we can roll over this project organization into the next project very much as planned. We're very pleased with all these element of the next large investment and growing our portfolio with new type of FPSO projects. The market is still very good. The windows for new projects remains open on one hand also because there's only actually 4 FPSO operators seriously playing in this market at the moment.
There are really also a lot of projects identified for taking FID between now and 2030. What you see here on the map is that, you know, where the most of these projects are exactly in the areas where we already have operations ongoing. However, we focus obviously now on Gato do Mato, but the next target is for that matter then the redeployment of BW Opportunity. That unit now has completed upgrades and repair and refurbishment for the, let's say, the generic part of the facility. We're really ready to take on a new project for this unit that will then be a redeployment project. It's a versatile unit.
It can be both oil and gas development, but we focus on gas because it has a very nice size of gas processing plant. Not sure that for us. Okay. I continue. The difference with redeployment projects is they have a very different nature capital allocation-wise. The amount of capital to invest in such unit compared to large new build projects like Gato do Mato and Barossa is very different. The lead time from investment to cash flow is much shorter. This is actually a very nice project to bring on stream after Gato do Mato and in the next one or two years.
We're also progressing our initiatives to decarbonize oil and gas facilities to floating wind. We're well positioned to a joint venture that we put in place between BW Ideol, our floating wind subsidiary, and BW Offshore. We leverage really the FPSO competences with floating wind competencies. We now expanded that with a collaboration with Framo Green Technology and the Grieg Group to focus on the Norwegian continental shelf as a first area to demonstrate that this is technically and economically viable. Another area would, by the way, also be U.K. because it's the cost of CO2 emissions that really underpins the business case here. These are areas where there's a lot of focus on CO2 emissions and put a price against those emissions.
Therefore, it's naturally to look at opportunities there. We have identified two or three of those opportunities that we will work on as we speak. Of course, when I talk about FPSO competence here, it's not just technical and operational, it's also our ability to offer those solutions to a lease and operate model in a similar way as we do for FPSOs or even in combination with FPSO investments. A bit more about BW Ideol itself. It's clear that the floating wind market is expanding rapidly. If you compare last year, this time BW Ideol targeted a floating wind pipeline of 10 GW. By now, 1 GW of that is actually under development.
Another 3 gigawatt is substantiated, which mean for us that we have actually put partnerships in place and specifically target site or tenders. The pipeline has increased from 10 to 30 gigawatt. That's a factor 3. BW Ideol expanded their positioning with a partnership in Taiwan. The project in South Brittany in France is progressing and there is an award expected mid-2023. We think in the partnership with EDF and Maple Power, BW Ideol is very well positioned. Globally, you see this growth of the wind market is materializing in a size of 185 gigawatt now. That's double compared to the picture that we saw last year. All this says is this, floating wind is a very rapidly expanding market.
If you would translate it into, for instance, capacity of floaters that you would need by 2030, you would come to more than 3,000 floaters. It also underpins the reasons why we invested in exclusivity in Ardersier Port in Scotland, because that's a strategically very attractively located site where we could, together with BW Ideol, capture the floater manufacturing market for the U.K. and even broader in Europe. BW Energy, it will be quite an exciting first quarter next year and BW Energy is preparing for a ramp of production of at least a factor two, and that consists of three components. The first one is the Tortue field itself, from which they're producing today through our FPSO Adolo.
If the new gas lift compressor is commissioned, then the production will be taken from all 6 wells. In addition, we will then have the tie-in through the BW MaBoMo to Adolo interconnection pipeline into FPSO Adolo and bring the Ruche Hibiscus production online. In addition, in Brazil, BW Energy expects the closing of the Golfinho transaction with Petrobras and Saipem, and that will then add the existing production of that field, which is currently 9,000 barrels per day as well. It is on three fronts, you know, we see production increases starting from end of the quarter, first quarter next year, which is exciting for our FPSO Adolo operations as well because we also have a production tariff there.
Of course, as a 25% shareholder, we're also following this with a lot of interest. Namibia shows interesting developments as well. You may have followed that there are nearby discoveries made by some oil majors. Therefore, BW Energy also embarked on a large 3-D seismic campaign to further validate reserves of the field and the license they have with the Kudu field in Namibia. Production is for this quarter, still around 10,000 barrels per day, resulting in an EBITDA of $61 and a half million, which was based on one lifting. Summarizing an outlook, I think this third quarter was a solid quarter. We're pleased with what we have achieved.
We remain fully focused on the Barossa project, and we're progressing the Gato do Mato project towards a contract in February, and we were making sure our project readiness is 100% and we have our finance in place by that time as well. We continue the divestments of the non-core FPSO fleet, and we're seeing good opportunities for BW Opportunity FPSO as a redeployment project following after Gato do Mato. Again, just mentioned, we look forward to the production ramp up next year by BW Energy. That concludes this update, but very happy to take questions together with Ståle Andreassen.
If there's anything from the others, I guess we can take those here. Yeah.
Christopher Møllerløkken from Sparebank 1 Markets . Two questions. One difficult, one easy. Start with the difficult one. On Barossa, with drilling currently suspended, I guess there's a court hearing next week. If drilling remains suspended, is it more likely that you'll just conclude the FPSO and it's on field and it will start producing, you know, from less wells than originally planned? Is it more fair to assume that if drilling is delayed, that you'll also be delayed in terms of delivering the FPSO? That's the first question. The second one is just on fourth quarter on Espoir. CNR is having a 45 day shutdown now for a maintenance on the FPSO.
Is it then fair to assume half a quarter on that unit in Q4 for your part, or are you fully compensated when the operator does that kind of shutdowns? Thank you.
Yeah. Well, may-maybe I'll start with the last one still, uh, 'cause I think there the, uh, sh-shutdowns in, uh, induced by the operator don't affect the day rate. So we're not, uh, seeing any change, uh, in, uh, in revenues on Espoir as far as as I know.
No.
No.
There should be no change to the contribution. Yeah, as I think most knows also the contribution is quite limited on the unit for the results overall.
Yeah. No. On Barossa, I think it's the former, meaning that if there would be delays in the drilling program which would affect the FPSO or if that would affect the startup of the field as planned, if that would happen, we will still go on rate, basically. Our contract is independent from that. That's a risk that is on Santos and not on us. That's one. That obviously gives us not only the comfort, but also the obligation to deliver the project as planned and on target, which is what we're doing. I want to emphasize that, and that's following the guidance we get from Santos.
Santos also really emphasized to us that, you know, we should really focus on the schedule, deliver per schedule because there's an at least 18 months buffer. The FPSO is on the critical path and drilling is not. This issue that Santos has or actually the regulator has, it's not even Santos, the regulator has, based on the permits or on the license to drill, these things will be sorted out and the expectation is that this can be sorted out well within those 18 months. In that sense it will not impact the overall project. There was a court ruling or the appeal of the court ruling took place two days ago.
I think the expectation is that in January we will hear more about that. Yeah, that's difficult to comment on what the outcome will be. I do want to stress that for Santos, the way they advise to us is you need to keep going, don't get distracted, this will be sorted. The FPSO is on the critical path and that's what you need to do, and that's what we're doing. Any other questions in the audience?
We have received some questions from our Q&A module. The first question comes from Erik Fossa in Carnegie. The wording on the Barossa project was slightly more negative this quarter. For example, the project is impacted by inflation and supply chain challenges. How should we interpret this? Is this from earlier challenges or yeah, is it under control or has economics further deteriorated?
Yeah. The project is very much under control. What you could say is we're now 50% complete. We're basically done with engineering and procurement. It is a phase in a project where you're in a good position to look through the whole project to the end. We've done a holistic analysis of everything we think can happen towards the end of the contract. Our conclusion is that although we're still, you know, drawing from contingencies, and in our models, contingencies are there to be used, we can see that we will exceed that towards the end of the project based on what we see today and based on that holistic analysis. That would mean we will also eat in somewhat of the EPC margins.
To that extent, you could say that picture is a bit more clear now than it was in previous quarter where there were more, I would say, moving parts than we have today. Because again, today we're in a construction phase, engineering procurement is kind of done, and this is always a piece where, you know, delays can occur, so that the delays and cost increases can occur. That picture is very clear. We now just have done the whole analysis towards the end. I think overall, you know, we still see this as a very sound commercial project. It's also important that everyone understands that in any case there's will no impact on the lease returns. We're just talking about the project margin.
Maybe just to add sort of from a modeling perspective in terms of what you were saying, because I think what we saw earlier in the earlier stage, you know, the range of outcomes were wider earlier. I think what you're saying now with going into an execution phase, we see the range of outcomes are getting pretty narrow. It gives us a pretty good view now on where we are, where we're heading. I think that's why we're comfortable with what you're saying now.
Yeah.
Yeah.
Yeah. Yeah.
There's a question from Håkon Amundsen in ABG. Two questions. Can you quantify the EBITDA effect of the Catcher maintenance in Q3? The second question.
Ah.
On Barossa, to make sure I understand this correctly, while you will draw on the contingency and some EPC margin, you still expect to complete the project within the original total CapEx budget?
Yeah. Okay. I can't remember exactly. It's $a few millions, which is the impact on Catcher. It's not a significant impact from the shutdown, but I need to go back and look at what the exact impact was quarter-on-quarter. Yeah.
Yeah.
We can come back to Haakon directly on this.
Yeah. On Barossa, I think we just explained that, no, it doesn't impact the CapEx budget from the asset company. We're only saying we're drawing from contingencies and margin on the project level.
That concludes the Q&A from the web.
Okay. Thanks, uh, thanks everyone. Thanks for your interest and have a good day.