Welcome to this Second Quarter 2025 Result for Prosafe. As usual, we'll do it if anyone online has questions. Please just send them to Reese and we'll read them out here and try to answer them as best we can at the end. I would say that the quarter and the first half of this year up to date has been a very active year for the company. Of course, one of the major work streams has been the refinancing that we concluded the 21st of July. Very happy with that and great support from both our lenders and our shareholders in coming to a fully consensual deal with all parties. Otherwise, you know, also in the operation we've been quite active.
We managed to secure a four-year extension on the Safe Notos and we also sort of worked on reactivating the Safe Caledonia and the Safe Boreas in the first half. That's sort of ongoing work on Boreas and we also sold the Safe Scandinavia in the second quarter. All in all, a very active quarter and I think, you know, the strategy, building backlog and refinancing, you know, that has been done and we're looking forward. Numbers-wise, Reese will come back to that, but basically I think more or less in line with our expectation where we came in on EBITDA and cash flow. We'll come back to that a bit later.
Looking forward on the market in general, I would say that Brazil is still sort of the market that's driving our segment, while there is a little bit less visibility in the U.K. and the North Sea in general. On the refinancing, as I said, we concluded that on the 21st of July, so that's now all done. We converted $193 million of debt into equity for 90% of the company. The existing shareholders are then getting 5% in addition to a penny warrant and that we are in the process of that. The penny warrants have been issued and just remind everybody that you have to declare those by close of business on Monday if you haven't done so. That's probably a good idea to do it if you have subscribed for it. That means that after this we'll have approximately 353 million shares outstanding.
Of course, a significant sort of increase in the number of shares. We also had sort of the part of this deal is that we got $75 million in new cash. That means that we have a fully funded business plan going forward, including sort of the SPSes that are coming up. Our debt stack, as you can see here, our gross debt is $306 million and our net debt post this restructuring is $220 million. The debt is for all practical purposes carrying an interest of 11%, while the senior, not the super senior, but the senior secured has a peak element of 9% that we are utilizing. Moving on to the fleet, Safe Zephyrus has been renewed, that was last year. The seats are now running to end of 2027 at $115,000 per day.
Safe Eurus is continuing on our current, I would call it legacy contract at $86,000 and Safe Notos, as I said earlier, has been extended for four years. That rate actually goes from $75,000 to approximately $140,000. That is a major uplift. I would say that the EBITDA for that vessel goes from $5 million-$6 million to the mid-20s, probably a little bit more. That is a significant uplift in the rates. She is due for SPS this year, beginning of next year, and we are actually in discussion with Petrobras to try to optimize that rather than postponing that to 2026 and rather than having two off-hire periods, to have one off-hire period between the contracts. That is a work in progress and I would say that is more optimization of the operation.
Also, just to make that clear on Safe Zephyrus , she is also due for an SPS towards the end of this year. Safe Boreas, she is in Singapore. We took her on a heavy lift from Norway to Singapore. She arrived in the middle of July and she is now working on putting the thrusters back on and getting ready for contract. We were notified by Shell recently that the startup window is between 16th of November and 16th of December. The earlier part of the window that we talked about earlier. She will then go on a standby rate in the beginning of the first half of September before she moves down to Australia. Safe Caledonia went on contract on 2nd of June according to schedule and she has a six-month contract. There are optionalities there and they have three one-month options.
They are declarable 45 days before the option starts. On Nova and Vega, there is nothing really new. I think we have a good discussion with COSCO where there is more or less the same situation there. When it comes to the market, this is the world according to Prosafe when it comes to supply. In total, there are 31 vessels in this market the way we cut it. That includes cylindrical units, monohulls, compacts, and jack-ups. Everything that we see that we compete on a day-to-day basis. This also includes laid-up vessels, not laid-up, but not delivered, the Nova and the Vega. In total, this is sort of the market the way we see it. When it comes to Asia, just to dwell on that, you see that there are eight vessels here.
That of course includes the Nova, Vega, it includes the Boreas that is in Singapore, and it includes the three Chinese vessels that have sort of been added to the supply here. Otherwise, looking to South America, of these vessels, 12 are currently in Brazil. Of those 12, nine are onto Petrobras. What we see now is that the increment, what they have contracted to date, I'll come back to that a bit later, but what they have contracted to date is an addition. They have contracted in the first round, they have contracted two, the second round they have contracted one, that is renewal of the Notos, and they also sort of contracted a separate tender. The incremental demand from Petrobras has gone from nine to 12 vessels. That's also the incremental demand in Brazil.
I'll come back a little bit to this later when it comes to what's happening in Brazil. This is the current market. I would say that the last done in the North Sea is probably like $170,000- $190,000 per day. We see that there are some requirements going forward. We think that the market in Norway and the North Sea in general is probably going to pick up from these levels. In Brazil, the Safe Notos, of course, was done at $140,000 a day. That's more or less the same as the Chinese vessels we contracted. They might have got a slightly higher rate, but in the same sort of vicinity as the Safe Notos. As you can see here, the nature of the market is very different in terms of the term. An average in the North Sea is six months, an average in Brazil is 26 months.
Petrobras is typically contracting for four years. Earlier this year, Petrobras came out with a tender. It was a Lot 1 and a Lot 2. In Lot 1, they have contracted two vessels, the [Hi C3 and the Hi C5] . That concludes that lot. They've said that they would do up to five vessels. In the second lot, with a slightly later startup date, they have contracted Safe Notos. That's the four-year extension. We have reasons to believe that they might contract one additional vessel. Time will tell which vessel that is, but that's sort of a further incremental demand than what I alluded to earlier. That means that Petrobras will go then from 12 to 13 vessels. Significant uplift in the number of vessels that will be then deployed to Petrobras.
We think that it could be that Petrobras is coming out with a tender later in the year or even next year. We will see, but this is a fluid situation. They also contracted a compact semi-submersible for a shorter and more low-spec work earlier in the year. When it comes to the market, I would say that we see good activity both in West Africa and Guyana. In the North Sea, we have less visibility. There was one contract awarded for 2026. That was a low-spec unit with a pretty low POB. That was done by jack-up. The POB there, the requirement was less than 100 people. Emerge jack-up took that job. Otherwise, we see for 2027, there is some more work in the U.K. Further out in 2029 and even further out, we also see some requirements in Norway.
This used to be very much the backbone of our market. Now that's definitely moved to Brazil. When it comes to operation, I would say that in general, very happy with operation in the quarter and also the first half. No LTI safety-wise. We had one LTI actually, but safety-wise in general, I think we are operating well and we have high utilization that we typically have. The Safe Caledonia was on contract to Ithaca on the Captain field from the 2nd of June. Since then, she had been 100% off time. I also explained the Safe Boreas earlier. Currently, we have five units in our fleet, the four modern units and Safe Caledonia. Backlog, if you look at this, we have focused a lot on the backlog and reactivating the vessels.
Compared to the second quarter last year, our backlog has increased by 60% and of course at a much higher rate. That is something that we are happy with and that's for obvious reasons. We're going to continue to focus on that going forward. The Safe Caledonia, we see there that there is limited visibility in the North Sea for 2026. There is more visibility in 2027, but there are some opportunities in West Africa that we are looking at for Caledonia. The next in line is then the Eurus in Brazil, the renewal there, and also the Zephyrus coming after. Typically, you know, these contracts are sort of renewed a year ahead of expiry. It varies, but of course there is a continuous dialogue with our clients. Financial, Reese, do you want to take us through this?
Yeah, thank you, Terje. Yeah, touching briefly on the results for the quarter and the first half. Slightly lower EBITDA this quarter than the previous quarters. I think that's driven mainly by timing. We had Concordia on hire last year, had Concordia on hire until end of early March, and we have now Caledonia starting up a little bit later. I think the phasing there impacted slightly, but as Terje mentioned, very much in line with our expectation. Looking a little bit ahead, we do see Boreas starting up a little bit earlier than we thought. We will see an improvement of the EBITDA going forward. We have gone out and said we expect EBITDA in the $35 million- $40 million range for the full year, and that is driven largely by Boreas coming on to contract in the second half. Not a lot of news on the income statement.
I think, you know, good to point out, I think, so the other financial items, obviously we've been through a lengthy refinancing process with a debt for equity and did incur, you know, some significant advisor fees. It was fully restructured, fairly consensual, so that obviously helped, but I do think we're seeing the back end of those fees now that we finally got the deal done in June. I think we will also see a significant improvement in the net loss position also going forward. Balance sheet, again, post the restructuring, we will see an improvement obviously in the equity with the conversion of the $193 million of debt. I think the main thing that we're focusing on very clearly when it comes to the balance sheet is working capital, which has an impact on our cash situation. This was the picture in Q1.
I think we saw quite a bit of working capital movement. The one thing that's important to kind of point out is that we have received a significant portion of mobilization fees in relation to the Safe Boreas and the Safe Caledonia contracts. That obviously has been a very positive working capital movement, which is offsetting to a large extent our CapEx. That was the intention of those contracts that by and large they are being funded by the client. Obviously, what we will see for those who are a bit interested in the accounting, we will see that go the other way when we start to recognize revenue in EBITDA. We'll have positive revenue in EBITDA and more negative working capital movement as we need to recognize the EBITDA over the contract period.
Decent cash flow in the quarter, and I think, as Terje mentioned, we're sitting on, you know, sitting today at around about $90 million of liquidity, which gives us, you know, a sustainable liquidity position looking ahead. We do have the remaining SPS projects to complete. We got the SPS on Notos, we got the SPS on Zephyrus. Those are coming up now between Q3 and Q1 next year. We also have the Boreas, which I think a good portion of the Boreas cost is behind us, but we still need to get her on contract here towards the back half of the year. With that, I will hand it back to Terje to wrap things up.
Yeah, outlook. Again, we are sort of in an improving market and we see it, of course, for Prosafe there is a lagging element due to legacy contracts. Based on the current rates, I'll come back to illustrate that a little bit. We are both sort of the supply-demand here, but also just the fact that the legacy contracts are coming towards an end is going to be an uplift in our earnings going forward. As we said, our guidance—this is the first time we have done guidance for a long time—but that's between $35 million and $40 million for the year. This is giving an illustration of what we think the earnings potential is in Prosafe based on the current market.
If all the contracts were set at the current market, so for illustration purposes, looking ahead to 2028 and assuming everything is reset, that's the first year that the legacy contracts are reset in full. If they are reset at the current market, i.e. $140,000 per day, the same as Notos, we will have an EBITDA in the vicinity of $100 million, $90 million- $100 million. That's the earnings potential. Of course, if the market goes up, there is more potential. If the market goes down, there is less. This is a state of the union as of today. When it comes to the debt carrying capacity, based on the current guiding for 2025, the net debt to EBITDA is quite high.
Looking forward, if this is the case in 2028, with these assumptions, we'll have a net debt to EBITDA of around 2.5, which is very different than what we had in the past. We think that there is significant earnings potential and value creation potential in Prosafe. This is looking at, again, the steel value here, enterprise value. Our current net debt is $220 million, current market cap is about $140 million. That means that enterprise value today is around $360 million. Comparing that both to the broker values and new building replacement costs, I would say that to build one of our rigs today, one of our vessels, will cost at least between $300 million and $350 million. That means that the new building parity today is above $1.2 billion. We don't put any value on the Safe Caledonia, just on the four modern units.
It's based on new building parity. Of course, there is significant upside as well. The question is whether there will be built more accommodation vessels. Time will tell. This sums it up. We are the market leader and we have capacity going forward when the contract is coming up for renewal. I think after this, we have a sustainable capital structure and we have a fully funded business plan. Brazil is very much the focus and it is and it's going to continue to be for Prosafe and also for our market. We are focusing to continue to build the backlog. I think on that note, of course the advantage by operating in Brazil compared to the North Sea is the long contracts. That's one of the main reasons why we like Brazil so much. There you get four-year contracts while in the North Sea, it's much more staggered.
You need to take a lot more risk on options and you need to take a lot more risk on filling the void spaces. The visibility we have in Brazil is something that we like a lot and that we are going to continue. Brazil is a difficult market to operate. When you're there, as I tell my colleagues, when they complain sometimes, that's our competitive advantage. That's really where we are strong and where we want to continue to be strong. With that, I think we'll end the presentation as such. Reese, do you have any questions from the audience? Maybe you can talk into the mic. It's over there, Reese.
How do you see the demand outlook in Australia? Do you think the Boreas could stay there post the upcoming contract, or do you think you'll have to move it to Brazil or West Africa?
I think that's clearly our, you know, the pure sort of math on that. That's clearly our priority to stay in Australia. Next year there will be two vessels operating in Australia. We see that there is demand from Australia. The visibility is not great, but that's clearly one of the, you know, for obvious reasons, one of the focus areas that we'll see if we can find new work for Boreas in Australia.
Thank you.
We can add also that we've mitigated somewhat the risk. We've mitigated somewhat the risk in the sense that the current contract covers returning the vessel back to this side of the world. We have mitigated somewhat that as well. Clearly, to stay in Australia would be advantageous.
Okay. Nothing to you, Reese?
No, nothing.
Thank you very much. We'll end the presentation here. Thank you for.