Ladies and gentlemen, thank you for standing by. I am Emma, your Chorus Call operator. Welcome, and thank you for joining the BW Offshore conference call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session.
If you would like to ask a question, you may press star followed by one on your touch-tone telephone. Press the star key followed by zero for operator assistance. I would now like to turn the conference over to Marco Beenen, CEO. Please go ahead.
Good morning, and welcome to the Q3 2020 presentation of BW Offshore. In this call, I will give a general update, and our CFO, Ståle Andreassen, will cover the financial results. Moving to the next slide, our disclaimer.
Please take note. Moving on to highlights on slide three. The Q3 was a challenging quarter from an operational perspective with both the Yùum K Náab and the Sendje Berge FPSO experiencing shutdowns, and that impacted our commercial uptime and financial results somewhat.
Our EBITDA of USD 98 million and our operating cash flow of $82 million were therefore a bit lower than previous quarter. This is also further explained by a one-off settlement of $8 million that we had in Q2, and no such one-off revenues occurred in quarter three. As expected, we received confirmation of a contract extension of Petróleo Nautipa till September 2022.
Furthermore, we reached an agreement with the New Zealand government for a fully funded stay and demobilization out of New Zealand, and this will reverse our voluntary liquidation. During the quarter, we were able to progress various tenders for new projects.
Last but not least, the board of BW Offshore has approved a quarterly dividend as part of the annual $25 million cash dividend program. Moving to slide four with an update on COVID. As you are all well aware, the COVID-19 situation globally is not improving, and it requires proactive risk management planning and procedures to manage the operational impact.
We are pleased that there were no new FPSO outbreaks since our quarter two reporting. The situation remains challenging, in particular, in relation to crew logistics. It doesn't come without costs. The managing COVID has cost us about $4 million per month in this quarter.
However, with full implementation of PCR testing protocols, as well as improvement in the flight availability in several countries, this is now reducing to about $2 million per month towards the year-end and going forward. Operational update on slide six. On the right side, you see the HSE statistics with average ratios per million man-hours over the last 12 months. This is in accordance with the IOGP definitions.
We're striving for zero harm, and the most important metric to achieve this is the orange line, which represents the high potential incidents. That's trending downwards in a satisfactory way. The left side of the chart shows the fleet uptime, commercial uptime, and it displays the dip that is caused by the incidents on Sendje Berge and Yùum K Náab, as I just explained. Moving to slide eight with further updates on some of the units.
First of all, Catcher, our operation in the U.K. While the production was impacted by the need to remove calcium naphthenate from the produced water systems, our commercial uptime was not impacted as this counters company under production. It does, however, prevent us to capture benefits from excess production.
We're working closely with our client, Premier Oil, to optimize the management of this issue and to avoid or at least reduce downtimes in connection to this. Furthermore, it's worthwhile to refer to earlier announcements made by Premier about their merger with Chrysaor.
This merger creates the largest London-listed independent oil and gas company, and that obviously strengthens the Catcher field operator's financial position. I already mentioned Petróleo Nautipa with the contract extension, and Sendje Berge is now back in production again since mid-October. Also mentioned Umuroa.
We're very pleased with the recent agreement we made with the Ministry of Business, Innovation and Employment in New Zealand, as that will now cover all our costs till departure from New Zealand. Then Vicente, the contract was ended in Q3 , and we consider her now for redeployment or recycling in 2021.
Moving on to slide eight, BW Energy, our associated company doing the field development in Gabon and Brazil. We're looking forward to restart the Dussafu development activities as soon as the COVID restrictions are lifted. In the meantime, the opportunities in the downturn caused by COVID has been captured to acquisition of Jack-up platforms rather than using newly built wellhead platforms for the Hibiscus and Ruche developments.
This is expected to reduce development costs with about $100 million, and it will also reduce time to first oil, as well as the environmental impact of construction. The strategy of joint value creation to FPSO redeployments allowing for short cycle of phase developments remains unchanged. We just have some delays due to COVID in executing those plans. The operations in Dussafu are still strong.
Current production levels are around 40,000 bpd , with an average operating cost of $90 per barrel. Through our 39% ownership, current value in BW Offshore is about NOK 11 per BWO share. That brings me to the fleet contract overview on slide nine. What is worth noting is Petróleo Nautipa beyond 2022, we're having discussions with our client, VAALCO, to enter into a new contract beyond that.
Although expected to come off contract mid-2021, we consider her as a very good candidate for the Maromba field development by BW Energy. Abo further down, discussions are ongoing for further extension. This is a situation we are facing every year, and I find it quite likely that this contract will further extend beyond the end of this year. Moving to the next slide 10.
Our solid backlog provides long-term financial visibility. We have a total backlog of about $4.2 billion by the end of Q3. Firm backlog is about $2.6 billion, and 80% of that backlog is delivered through the three main units we have in the fleet, and that is Catcher, Pioneer, and Adolo. Again, the Catcher partnership, operated by Premier Oil, is the largest customer.
I mentioned the merger with Chrysaor, which has significantly strengthened the balance sheet of that counterparty. With that, I give over to Ståle Andreassen to run us through the financial results.
Yeah. Thank you, Marco. We move to slide 12. As usual, we're starting with an overview of the key financial figures for the quarter. As you can see, and also earlier mentioned, we achieved an EBITDA contribution from our operations of $98 million in Q3.
It is a reduction of about 15% from what was achieved in the Q2 . Firstly, we did expect Q3 to come in somewhat lower than the Q2 as a result of the $1 million+ , one-off settlement we received in the Q2 for the outstanding claims related to the former project for FPSO, P-63.
We had, as Marco mentioned earlier, we had some downtime on Yùum K Náab now. The unit operating for Pemex was hit by a tanker during offloading, and this led to approximately one-month shutdown of the unit. We have not been paid by Pemex for this period.
Although we are disputing this, we have not recognized any revenues for the quarter, and this has impacted our EBITDA negatively. On top of this, we continue to battle with COVID. We are investing quite highly to manage COVID costs related to crew and related, which has an impact on our results for the quarter.
When you look at the revenues, it's mainly reduced due to the two items I mentioned before, the settlement we have in Q2, and then the downtime we had for Yùum K Náab in Q3. Moving on to slide 13. As you can see, depreciations were pretty much similar to previous quarter at $63 million. This overall gave us an EBIT or operating result of $35.1 million for the quarter. Net interest expenses came in at $13.2 million, which is down from $15.2 in Q2.
This was as expected as we continued to amortize on our debt. Also as we have done an additional repayment on the corporate facility in Q3, reducing our gross debt and consequently also some the interest expense.
We had a gain on financial instruments of $8.3 million in the quarter. This came as a result of positive mark-to-market adjustment on our FX hedges. As well as our interest rate swaps as both U.S. dollar as a currency has strengthened against the NOK. Also as we see U.S. dollar swap rates have increased quarter-on-quarter.
Other financial items were a negative by NOK 3.3 million, this is predominantly due to revaluation of our Nordic High Yield bond loan, which is denominated in NOK. As we see, the Norwegian kroner has strengthened against U.S. dollar in quarter. We will have to take a mark-to-market loss on that.
Note any negative effect from valuation or revaluation of the Nordic High Yield bond will have a positive effect on financial instruments as the loan is fully hedged. For presentation purposes, we have to show this on two separate lines. We recorded a loss from equity account investments of NOK 4.7 million during Q3. This is coming from BW's 38.8% net share of the results from our investment in BW Energy.
Income tax expense was NOK 7.6 million for the quarter, more or less in line with our expectations and within ordinary fluctuations quarter-on-quarter. Overall, we had a net profit at NOK 14.6 million for Q3 . Moving on to slide 14 and the cash flow review. As you can see, we started the quarter with a total cash position of NOK 206 million. Operating cash flow was $82 million for the quarter. This was slightly behind our target.
Although we had a reasonably steady quarter, our cash flow was affected by the incident on Yùum K Náab. We also see that we had higher cash outflow as we have been building some working capital, buying additional spares and building on our inventory due to higher maintenance activity on the FSO fleet.
Just worth mentioning, if you compare operating cash flow this quarter to Q2 , which was roughly $120 million, it is important to remember we did receive a one-off settlement from Petrobras in Q2.
Another thing in Q2 was that we received back $17.5 million related to cash collateral, which we had put up in Q1 due to extreme FX movements we saw where the US dollar strengthened significantly against NOK. This required us to put up some cash collateral on our hedging instruments.
Due to the reversal of the U.S. dollar versus NOK in the Q2, this was all received back. It's just important to notice that there was some one-off movement in Q2 that gives an artificially high variance quarter-on-quarter. We did spend NOK 10 million on maintenance CapEx on fleet and some other investments related to some pre-fleet activities we were performing, which overall gave a total free cash flow of NOK 72 million for the quarter.
We reduced our debt position quite significantly in Q3. NOK 35 million of a total of NOK 109 million was scheduled installments on the Catcher and PMA facilities. The remaining NOK 75 million was a one-off repayment we did on the corporate facility.
We had a quite large cash position at the beginning of the quarter, and we used this to trim our balance sheet by repaying on the revolver which will reduce our interest cost going forward, but which retains our liquidity as the revolver, the down payment just decreases our available draw on the revolver. We paid NOK 12 million in interest on our facilities.
We continue to pay dividends with NOK 6 million paid also in Q3, and we paid $8 million in relation to the preference share agreement we have for Catcher. Total, we ended the quarter with NOK 142 million in cash. Moving on to slide number 15. As you can see, there's no surprises when it comes to the financial position of the company and shouldn't be, as key units in the fleet are on long-term contracts and results are relatively steady.
We did continue to reduce our net debt, which stood at NOK 976 million by end of Q3. The leverage ratio continued to trend more or less flat. It stood at 2.1x last 12 months reported EBITDA for the quarter. I want to say although this has trended flat, we expect it to continue to trend in a downwards projection as we continue to deleverage and amortize off our debt as we go.
The equity ratio increased by 1.7% in the quarter to 37.5%. Although there is a positive effect from the net result this quarter, the main impact is coming from the reduction in our cash position as we repaid on corporate loan facility and effectively reducing gross debt and the balance sheet size. Moving to slide number 16. It's a well-known slide.
We have showed this before, and again, we want to emphasize that with this, as you can see, we have no major debt maturities before late 2023. We have refinanced all our capital market debt late 2019, and that gives us flexibility from a balance sheet point of view. We continue to amortize on our debt.
As I mentioned on the previous slide, we are amortizing approximately NOK 120 million per annum for the next couple of years, while this will gradually increase as we get into 2023. Overall, it does give us ample time to plan our financing needs and also flexibility for any opportunities that comes around.
Going to slide 17. We have basically two priorities, one being to maintain financial flexibility towards any growth opportunities, while the second one being providing predictability when it comes to returning value to our shareholders.
As you've seen on the previous slides, we continue to deleverage as long as we have no new projects. We have a strong liquidity. We have almost $390 million in available liquidity when you're adding together available credit lines and cash. As Marco mentioned earlier, we do expect that we will be able to drive down the cost of this going forward, reduce it by approximately 50% as we can do our own PCR testing and as we see borders opening,
Which allow us to more effectively move personnel. On fleet, we see limited CapEx on the existing fleet. That, we think, will continue both for the remaining part of 2020 and also throughout 2021. Overall, we are predicting CapEx to be in the range of $25 million, and that includes any investment in the BW Opportunity.
We now come to the point where we have been able to conclude on termination for the contract for Sedco 207, which was this unit operating for Petrobras. The settlement for this has been more or less final for quite some time, and we have fully provided for any payment here.
As we expect now all formalities to be closed relatively shortly, we want to highlight this settlement and our planned payment of $40 million, which we have estimated to be paid in early 2021. As I said, it will not have an impact on our P&L, but it will have a liquidity impact of $40 million. When it comes to shareholder returns, again, as mentioned before, we will continue to pay a quarterly dividend as said.
We want to emphasize again, when you look at year to date, when you add up the BW Energy shares that we dividend in kind in the Q1 this year, the share buyback program that we executed in Q2, and dividends paid so far this year, plus planned paid now in Q4,
We will have returned almost $130 million back to our shareholders in 2020. We believe this stands a strong commitment to returning value to shareholders. With that, I'll hand it back to Marco for strategy and outlook.
Yes, thank you, Ståle. I will now provide an update on strategy and outlook. Moving to slide 19. We continue to capture the value from the existing fleet through the extensions on the fields where we operate and also through redeployments of units which come available, ideally with BW Energy.
This segment, the redeployment is, however, a bit slow given the low oil price environment we're currently in. We expect this will rebound when the oil price recovers. In addition to that, we are selectively pursuing new projects with leading E&P companies. We're currently focusing on Australia and Americas, and we're progressing well to be able to take an FID during 2021. Moving to the next slides, which will explain a bit more about these investments.
We aim to build new and different type of backlog, which is based on firm contracts of 15 years plus options, which excludes residual value risks. It means we're targeting infrastructure like projects with investment-grade counterparties.
That enables us to secure equity partners pre-construction. For the benefit of the doubt, there's no need and no intention to raise equity in the markets to be able to undertake such investments. The type of new project backlog will meet strict investment criteria, which is our 50% return on equity, which needs to be met during the firm period of the contract.
That ensures access to competitive financing. We have received positive feedback so far from extensive sounding with banks and equity partners for the prospects that we're currently looking at.
We minimize project execution risk to basically replicating the success factors of the Catcher FPSO delivery using the same team, leveraging our experienced project execution organization, also working with known suppliers and yards using our existing relationships and experiences. We also want to use the Rapid Framework newbuild FPSO concepts, which we have developed during feats in the past years.
With that, I'll move to summary. Last slide 21. We continue to manage the COVID-19 pandemic proactively as the situation lingers, but we also expect that this will improve during 2021. Protecting our people and operations remains the priority. We continue to deliver stable EBITDA performance, and that provides strong operational cash flow as well as the required financial flexibility.
We target a new FID in 2021, and we're also looking at energy transition opportunities where we can apply our offshore engineering and operations competence. With that, I would like to conclude this Q3 update, and we would be happy to take any questions.
The first question comes line of Frederik Lunde from Carnegie. Please go ahead.
Hi, good morning, guys. Thanks for giving some more details on how to look at investing in new projects. I was curious on when you mentioned taking partners, would they come in as the sort of equal partners fully sharing equity risk both on upside and downside in any project?
Yeah, thank you, Frederik. I can answer this question. No, typically, those partners will not take EPC risk, but will provide equity during the EPC phase.
Any sort of cost overruns or delays, which would be at your risk, but they will provide liquidity. Is that the way to think about it during the construction?
Yes, we are responsible for the EPCI delivery of the project. As I said, you can say we kind of de-risking that because there is, of course, a profit element in such EPCI phase.
Okay, great. I just did some calculations here looking at the company since listing in 2006. On my numbers, return on equity has averaged -3%, and I think accumulated EBITDA is about -$500 million. Investors are obviously spooked by the prospects of new conversions as that has typically increased risk historically. Obviously the market is now difficult. There's probably more pressure on the supply chain, both suppliers and shipyards have ample capacity.
You could say risk reward looks better. Again, if you look at investing in your own shares, I calculate a cost of capital 19%, which would have obviously much less risk as well than taking on a new conversion. I'm just curious to know to what extent you actually hold that investing or evaluate investing in the more buybacks versus a new project.
Do you see it as totally different investment decisions or do you see them as sort of equal opportunities?
Well, I think as Ståle explained, we need to strike a balance here. We do see a very good window of opportunity for, in the coming years, a couple of projects, but hopefully at least one in 2021, where we can make new investments with better returns than what you explained we have had in the past.
The main reasons for that is that we are now at a time where also strong counterparties, major oil companies are finding lease at FPSOs for long-term contracts, 15 years and beyond, interesting. That was typically not the case in the past, where the lease and operate model. We were kind of forced to take residual value and residual risk. That window is now.
Both on the demand side, there is a window of opportunity, and also in a way, on the supply side, there is one can say constraint because most of the active competition is pretty occupied already. We think we are in the right window to deliver the returns on investments on those new projects in this window. Then we need to be a bit careful with how much money or how much of our capital we allocate to share buyback or cash dividend.
We are, however, committed to sustain the dividend levels that we have today in any case. We also feel that in 2020, we actually have, as Ståle also showed, delivered to the promise to return to shareholders. It is a balance, and I think that your topics are absolutely valid. We will continuously monitor and strike that balance.
As we think there will be some investments coming, I think we have to be a bit careful with how much we promise and how much capital we allocate to immediate returns.
Okay. Thank you.
Thank you.
For any further questions at this time, please press star followed by one on your telephone. At this time, it appears there are no further telephone questions. I hand over to the speakers for any questions from the webcast.
Okay, thank you. We have some questions that come in via the web. First question here is from Magnus Olsvik from Kepler Cheuvreux. On COVID costs, are you able to pass some of that over to the client, or do we cover all the costs ourselves? Marco, that's probably a question for you to
Yeah. It's relatively simple. We can only recover when we have reimbursable contracts. On the contracts where we have fixed operating and maintenance costs, we're of course trying to push this back on our clients, considering COVID as quite an exceptional circumstance.
I'm sure you realize that the clients are also putting a lot of pressure on us to kind of reduce our rates in view of the low oil price they're facing and putting their revenues under pressure.
This is a bit of an arm twisting both ways. We cannot, of course, reduce our rates in view of low oil price, equally, that reduces the willingness of our clients to contribute to COVID cost. It is important that we protect our revenues, as we have been doing, as you can have seen.
At least now we're seeing that with, to a large extent, the costs were driven by the quarantine periods and not being able to move people out of country. Basically having two crews in country. That improves now, and that's why we're also guiding towards a lower level of cost, kind of 50% of what we have had so far by year-end and going forward.
Okay. Thank you, Marco. Next question is from Nick Serrano from Fearnley Securities. The question is, will you recover any of your year-to-date costs on the Umuroa prior to the November agreement date, or this agreement only cover costs going forward? Do you want me to take it or
Yeah, you can take it, Ståle.
Yeah. I think it's fairly straightforward. The contract is mainly a forward-looking contract. There is limited cost that will be covered for prior periods. There is an element of a small success fee when you meet the criteria for demobilization, if everything goes according to plan and that we're able to get the unit off field by mid-2021.
Primarily it's a looking forward agreement. Next question is from Espen Aakre. In regards to the low price book, pricing in stock market. Okay, why invest in new projects versus bigger share buyback programs? I think, Marco, you have already responded to this one. The answer would be the same as you gave to Carnegie on this, unless you want to add anything on this.
No, I think it's the same question.
Yeah.
It's a valid question, and I think I've answered that.
Yeah. Next question from the same person. Why did we not inform the market regarding the incident for Sendje Berge and Yùum K Náab now? Maybe you can fill in short, we didn't inform the market about the incident on Sendje Berge, that should be a well-known event. We also informed the market that there will be downtime as a result of it. Also the incident for YKN was highlighted in previous quarters presentation.
I think you can say with regards to the magnitude of this. We did not see this as incidents which would require us to send out separate press releases. In particular, as we consider this to be one-offs and not incidents which would have a lasting impact on our results. Next question from Magnus Olsvik again. Kepler Cheuvreux. Offshore energy opportunities was mentioned in the presentation.
Could you elaborate on what you mean by this? Will you enter new business areas outside the offshore business? I think that question's for you, Marco.
Yeah, I can elaborate a bit. I think the offshore energy transition is a fact. We see particular opportunities arising on the back of the growth in the electrification. I think it's logical to consider what our opportunities are in that space. That could, of course, be from gas at FPSOs contributing to power generation. It could also be renewable power generation, for instance. On the long run,
I see also opportunities in clean fuels for offshore hydrogen production, but that's further out. We're considering where we can capture those opportunities, and logically, you would do that with partners. That means with the right partners, you can also enter other business segments. A bit similar as we've done with BW Energy, where we basically use our global platform that we have as BW Offshore with operations in 10 different countries.
30-40 years project execution experience, offshore construction experience, operation and maintenance experience. If you put all that competence together, you can reapply that into new business models and new business segments like we did with BW Energy,
Where we partnered with a small oil company entity and integrated that with BW Offshore, and then you create a new business opportunity, new business model. I see opportunities to do similar things in the future in the energy transition space.
Thank you, Marco. Next question. That comes from Herman Lea in SEB. Can you please provide some insights into potential financial impact of the incident on Catcher in Q4? Should we think about the operational performance on Catcher in light of the issues in recent quarters? Do you want to elaborate on that? I see there's a couple of questions which are similar, we will get to that.
Yeah. I think there's a couple of questions, right, around Catcher I can see referring to.
Yeah.
A fire incident.
Apologies for the interruption. The speaker line has been dropped. We'll be dialing him back in as soon as possible, and we'll come back to your question. You'll hear hold music until this begins. Thanks. Ladies and gentlemen, we apologize for the pause in the Q&A session.
Please remain online. You'll be hearing music until the Q&A session resumes. Ladies and gentlemen, the speaker line has been reconnected, and we will now continue with the Q&A session. Please go ahead. Marco Beenen, your line is open. Please continue with your answer for the question.
Yes. Okay. Yes. Ståle, what was the last question? Somehow I dropped out of the call, but I'm back in now.
Yeah. No, I read it. The question was related to Catcher and the incident that we had in Q4. The question was whether we could provide some more insight into the financial impact of this incident, and how the market should think about operation performance on Catcher in light of these issues in recent quarters.
Yeah.
Just to take it, as you also mentioned, a similar question came from someone else as well on updates on Catcher following this incident, and whether the unit has restarted their production again.
Yeah. No, Catcher is fully recovered. It was a small fire in the switchboard. The investigation, the root cause of the fire is still ongoing, but we have so far identified the single component failure in the switchboard as a cause. We expect to start up very shortly. I don't think it will have a large financial impact on the financial results.
Just a follow-up. The second part of that first question was, what should we think about the operation performance of Catcher in light of having these issues? I think the question is, do we see this as an indication that there are ongoing issues on the unit, and that this will impact the financial results from the unit also going forward?
No, I don't believe so. This was a standalone incident. Again, we're having the investigation ongoing, but there's no signs of any systematic issue or concerns about the operations going forward.
Okay. Good. Then, catch. Yeah. I'll move to, as I said, there was two, three questions, which was about the same thing. Those are now covered. The next question is from Håkon Amundsen from ABG. You mentioned that EBITDA was impacted by increased maintenance activity. Will this impact the cash flow in the coming quarters as well? If so, can you quantify this?
We don't see that this is kind of a consistent higher cost level. We don't think we will see this as a consistent impact on the cash flow going forward. Naturally, we'll always have some fluctuation to the cash flow, as maintenance activities are campaign-driven and goes a little bit up and down throughout the quarters, and things also move a little bit,
Which might impact one quarter more than the other because you have higher kind of isolated activity in that quarter. The answer is no, we don't see this as kind of a shift in maintenance activity driving up our cost and consequently driving down our EBITDA going forward.
Next question from Andreas Sohmen-Pao. BW Energy has bought two rigs. Has it been discussed whether BW Offshore will operate this? Marco, do you want to add a point on this?
Yeah, I can answer that. The answer to has this been discussed, no, not really. These two rigs will be used as production platforms as part of the field development. BW Offshore could operate these as an extension of the FPSO.
It's also quite common that oil companies operate the production platforms themselves, and that could also be the choice that BW Energy makes. Yeah, I think that discussion may take place in due time when we get closer to the operation of these platforms.
Okay. Thank you. Next question is from Nick Manna from Sesame Place. What was the cause of downtime on Yùum K Náab? Did you say you're disputing payment expectation not to pay during this period? Can you give some color on the basis for the dispute?
Yeah. Okay, go ahead.
Yeah, go ahead. Oh. Okay, Marco, I'll start. The cause of downtime for YKM was that there was an offloading tanker that drifted and touched YKM. There was some damages to the hull, which meant we had to shut down for a period of time to inspect and make the repair. This led to a shutdown of approximately one month for the unit.
When I said that we are disputing this, it's because Pemex has so far not paid us for the month, for that one month we were down. We dispute it on the basis that it's not BW Offshore's responsibility to care for the offloading tanker or to make sure that stays with an adequate distance from the FSO during offloading. Yeah, that's the basis for the dispute here.
I'm not sure, Marco, if there's anything we should add to this, but I'm not sure there's so much more to say at this point in time.
No, I just want to emphasize that this took place in, I believe it was August. We included it in when we reported Q2 , even though it was a Q3 incident.
It was mentioned that it was a small collision. Yeah, as you said, there is a clear responsibility on the client side for this operation as well. That's why we have a dispute.
That is so far the last question I see that has come in on the web. I am not sure if anything more, maybe if the operator has any other questions from those who are on the line.
Yep. We have a follow-up question from the line of Frederik Lunde with Carnegie. Please go ahead.
Hi, Marco. Moving focus a bit towards the year with deployment candidate. You have a handful of idle units now. Could you give an update on the expected proceeds if you turn, for example, Umuroa to recycling, as you call it now? How many of these units do you see another point in keeping? I guess it's both an OpEx element and also some cash proceeds from recycling.
You could take it, Tor.
Sorry, the question was on how much.
How many did you see, do you think it's helpful to keep as redeployment candidates versus just recycling some of these units? Also the cash proceeds from recycling?
It's a bit of a strategic question in terms of what we see in the pipeline. I think to start with this, obviously, we want to keep units that are complementary, which means that they have capabilities. For instance, where we have a unit that's a good fit for a West Africa project and versus a unit that's a good fit for redeployment in, say, Brazil.
We don't necessarily want to keep units with similar characteristics in layup as we think going forward. Even though we work closely with BW Energy and they're working to find new prospects, we believe in the future, there's a limit to how many FSOs they can redeploy for us in the medium term. As of now, we have Athena, Berge Helene, and we have a CSV in Brazil as well as Umuroa.
Umuroa will not be available before early summer, next year. Coming back, I'm not sure I want to guess, you could say that we minimum should keep two candidates available for redeployment in this. Which means that maybe two of these could be a potential candidate for recycle. When it comes to the pricing, of course, it's very different depending on the size of these units. Although they are all FSOs, they're very different.
Athena is a very small unit, and the recycling value would be very small. For a unit like Umuroa, maybe Berge Helene, you're talking Berge Helene, for example, where we're net closer to $15 million in today's market. I think you'd see the price on Umuroa below $10 million. I think Marco, you're probably better at guessing this, I think in that ballpark of what you can get from a recycling on this.
CSV, chances are, of course, she's very far away from any market for recycling in Brazil. There we are probably down to NOK five-ish net proceeds if you are to recycle the unit.
Great. Thank you.
At this time, there are no further questions. I hand back to the speakers for any closing comments.
Yes. Okay. Well, thanks for your attention and the interest in BW Offshore. Apologies for the technical hiccup along the way. Yeah, thanks again, and all have a good day.