Songa Offshore Se (OTC:SGAZF) Q4 2013 Earnings Conference Call February 17, 2014 9:00 AM ET
Bjørnar Iversen – CEO
Jan Steinsland – CFO
Good morning, good afternoon and good evening ladies and gentlemen and welcome to the Songa Offshore’s Fourth Quarter presentation. Throughout the call all participants will be in listen-only mode and afterwards there will be a question-and-answer session through the phone lines. And just a reminder this conference call is being recorded.
And now I am very pleased to present the CEO Bjørnar Iversen. Please begin.
Thank you very much. First of all I’d like to welcome you all to the Songa Offshore SE presentation for the fourth quarter 2013. And before we go into the figures it could be good to establish the perspective on the Songa Offshore SE.
Fourth quarter is of course the quarter where we recapitalized Songa to secure the delivery of the Cat D rigs and also to take us to the major long, fixed term contract that we have with Statoil, that starts off second quarter, 2015 for the first Cats starting with day rates around the 480,000. So I think that’s the overall setting and of course the figures in this quarter are being [Technical Difficulty] back to recapitalization and we will come back to that during the presentation.
Next slide, okay. Then we have the disclaimer and we go to next slide, please. Thank you very much.
Okay, let’s look at the financial performance, overall for the fourth quarter. Our EBITDA for the fourth quarter was $60 million compared to $51 million in the third quarter 2013. Fourth quarter EBITDA negatively impacted by non-recurring items of $4 million included in the G&A. Then we have the impairment charges of $72 million to book value of $200 million for Songa Mercur and Songa Venus.
And on the financial expenses, the fourth quarter finance expense of $56 million increased from $12 million, reflecting non-recurring of $48 million from restructuring of bond loans and related financial instruments, of which $43 million were non-cash. Then tax change of $32 million, of which $26 million is non-cash. That brings us to net loss of $137 million compared to net profit of $6 million in third quarter 2013.
And as we see from the graph there, increased EBITDA but as we said here we have a billing change in everything under the EBITDA due to the recapitalization as many of you probably followed during the investor presentation previously.
Okay, let’s then move to the highlights. Okay, highlights. We completed the refinancing with $400 million in new capital and 5% average day rates increase of the eight year firm Cat D contracts with Statoil. Then we have a fantastic up time with the operating fleet, and the fleet achieved 99.8% operating efficiency over the quarter. We are very happy about that.
Sale of Mercur and Venus is progressing, and financing of Cat D 1 & 2 credit approved by all lenders and ought to be signed shortly. Strong interest in financing of Cat D 3 and 4 with expected higher leverage than Cat 1 and 2, following the day rate uplift and the recapitalization – refinancing of Songa.
Cat D newbuild project is continuing according to plan, both on cost and schedule. No change in cost nor schedule in the fourth quarter compared to the third quarter and we can also say we have had good progress made on the Songa Dee SPS preparation and we will come back to that at some later point.
Okay, let’s then move to subsequent events. Songa Venus signed one additional well with Mubadala Petroleum last week estimated to two to three months at $226 day rate. That will bring us probably to end-April, early-May for the Venus. Statoil pre-delivery loan, $222 million of that we repaid $111 million and the Swedbank pre-delivery loan of $50 million was also repaid in full in January 2014.
Frederik Mohn, owner of Perestroika he was elected new Chairman of the Board 24th of January, 2014. Christina Ioannidou and Jon E. Bjorstad were elected new directors at the same date, 24th of January, 2014.
Next slide please. Now we are on page six, strategy. We continue to build a new Songa under the new Songa vision and I would like to again repeat the main message. Songa Offshore, a midwater drilling contractor focused on the North Atlantic basin, focusing on safe and cost efficient operations. I think that sums the core focus of the Songa Offshore in a very distinct way.
Okay, next slide, with an experienced management team, this quarter we had some changes in the top management team where Jan Rune Steinsland took over from Geir Karlsen as the CFO after working here as Executive Vice President for half a year and Mr. Mark Bessel who comes from Transocean and Ocean Rig took over as COO. Both of them has done great changes and helped us to lift Songa to even a higher level.
Okay, next slide please. What are we building? We are building Norway’s largest semi-submersible company in 2014 and 2015. If you look at the map we see that Songa will be in all operating areas of the Norwegian Continental Shelf from the south to the north. We see two of the new Cats will start and commence drilling at the Troll Field in the southern parts or outside Bergen and the number three, the Songa Encourage will start to drill in the Norwegian Sea serving like the fields of Heidrun and [Njord], Njord area and then we have in the high north, in the Barents Sea we have the Songa Enabler from the winterization.
It’s also worth mentioning that all these rigs are set up to do Artic drilling and the Songa Enabler is fully winterized. The three others are prepared for winterization but needs a small kit to be updated but just marginal upgrade will bring the whole Cat D fleet, the four of them into Artic drilling and we’ll be then able to operate in the envelope, in the high north, which I think is a very strong competitive advantage for Songa.
Next please. Songa has today 50% of approximately 50% of Statoil’s contract backlog on the Norwegian Continental Shelf. The pie to the right shows that there we have 40 drilling years on contract in Norway with total of 80 and we are considerably larger than all other players here on the Norwegian Continental Shelf.
The graph to the left shows our backlog per rig and as we see $836 million in average per rig and that makes us definitely the drilling contractor in the world with the longest contract portfolio and I think that is two very important parameters looking at Songa, having a big part in the Norwegian market, having long contract and being the main supplier of drilling services to Statoil.
Next, operations, solid performance. Next please. Let’s then take a look at Songa’s operations in the last quarter. Looking at the graph to the right we see that the operating efficiency for fourth quarter is close to 100%, 99.8% to be exact. The operating efficiency of the Norwegian fleet was 100% for the quarter which is extraordinary and the Norwegian fleet had an earnings efficiency of 97% during fourth quarter.
Songa Delta also executed an intermediate SPS which was completed during the month of October and November without any downtime which was also very good. The operating efficiency of Songa Venus of 99% and the earning efficiency of the Venus, 96% in the fourth quarter and the operating efficiency of Songa Mercur of 100% and an earnings efficiency of 99% following the ENI contract commencing on October 9th.
Next please, rig operating expenses, let’s take a look at the details related to our OpEx and if we look at the fourth quarter the Songa Delta had $184,000 per day, the Songa Dee, the same $184,00 and the Songa Trym, $209,000. That gave us an average of $192,000. I will come back to the comments there.
Looking at the Venus and the Mercur, 94 for the Venus and 110 for the Mercur giving the two international rigs an average of 102.
Looking back at Trym, Trym with 209 had high cost due to a top drive repair and some catch-up project work that increased the OpEx for the period. But also if you look at the comments, at the bottom of the page the Norwegian units carried in the quarter a cost of $13,000 per day per unit on the Norwegian fleet of training expenses and related cost for the Cat Ds.
It was not possible for us to according to Norwegian or international country rules to book that to the Cats because they aren’t currently working on the Norwegian rigs but are being trained for to the Cat Ds. So in average here I think we have expense approximately 15 persons per rig against those Norwegian rigs, so their OpEx $13,000, then higher than expected. So adjusted for that we are positive and looks positively at the cost level and the cost development that we have had in the Norwegian fleet in the last couple of quarters.
And I think to comment on that I think this $13,000 when we take delivery of the two first at the end of the year they will be reduced probably by I would say three quarter of that cost will disappear and then we take delivery of the two last early next year and we will also see a reduction of $13,000 disappearing from the OpEx line on the Norwegian fleet.
To go to comment on the Songa Mercur there, on the two, comment two, as we see in the Mercur we were down in Q3, 2013 to 79 and we went up to 110 and that is due to that we amortized some mobilization cost into third quarter that was amortized into fourth quarter. So in average, we could say that the cost there is also under control in the area of 90, 95.
Let’s go to the next please, contract status. Okay, looking at the contract status, we see there is a couple of things that I would like to bring the attention to the listeners and that is of course you see that the optional period on the rigs are from 2016 to 2017 from the Norwegian fleet and subject that Statoil is executing all those options, it will be basically mid to late 2017 when these rigs are ending the contract with Statoil. We will come to that when we look at the market graphs on the next pages.
On the NCS newbuilds, the Cat D rigs we see the new day rates there in the columns and we see below the international rigs and I would like to comment a little bit on the international rigs. We see the Songa Venus there bringing us into second quarter with well signed last week as I said with the Mubadala and we are working hard to back fill that rig with other wells as well.
And below there we see the Mercur being filled up, we are currently doing Idemitsu well at 260. After that, we got to do two fixed wells from Mubadala, that was moved from the Songa Venus to the Songa Mercur and that is wells at 230 and after that we have other two wells with Mubadala/ Petronas and that hopefully will bring us well into 2015 and even further to the mid-of 2015 if those options are being declared. And I think that’s the comment in general I will come back and comment more on the market situation going forward on the Songa Mercur and Songa Venus at later slide.
Moving to the order backlog, as I said initially the Songa case is about bringing us through 2014 and 2015 executing the SPS on the Dee which comes up this coming summer and also taking delivery over the next year, 1.5 years of the four Cat D’s. That brings us as you see to 2016 turnover there in the range of $1.1 billion and if you take traditional OpEx and do your OpEx analysis you will see that probably the EBITDA at that time will be in the range of 50% plus. And your also see the strong backlog here of fixed $6.6 billion and we have further $8.4 billion in option revenues.
Next please. And then we are at the market update. Remembering back to the comment where our rigs are going off-contract we see from the market update that this seems to be based on analysis from Fearnley’s and Petrodata and also Arista Energy, we see that there will be deficit of rigs, of two field rigs in Norway from end of 2015 and going forward, especially then in 2016 and ‘17. I think this consensus among the analysis that there will be pretty tight in 2016 and 2017 on the Norway Continental Shelf.
Next please. In that perspective we could also look at the market and average day rates in Norway. As we see here, we see that Songa signed the current rigs around 2010, between 2010 and 2011 and we see that we basically hit the rock bottom for the last year, dragging down the market with our rigs, our current rigs signed around I would say $360,000 day in average and in that perspective, we see an upside if we look at the current day rate where we see the third generation dayrates is close to $500,000 and we see the fourth generation above $500,000 and climbing close to $575,000 in average. And that’s very interesting to see in the perspective of both over options towards Statoil but also up against the potential market when those contracts are due.
Summing up the market update, the North Sea, semi market is very strong with a very high entry barrier to Norwegian Continental Shelf with a very few potential rigs to add there, especially on the Norwegian Continental Shelf there’s tough rules and regulations to be met and it’s very challenging for a rig not being built for the Norwegian Continental Shelf to enter. It is easier to have an inflow of maybe old deepwater rigs, ultra deepwater rigs into the UK side but to Norwegian Continental Shelf, we see challenges or very high barriers to entry.
As I said, the forecasted rig demand from Petrodata, from Fearnley and Arista shows under supply and distinct under supply from 2015 to 2017 and we have good tender activity for the Songa Mercur and Songa Venus. We have very good and close corporation with Petronas and Mubadala and we hope and we will work very hard to continue to roll those rigs further and we are very happy with the performance of those two rigs, that has delivered, both of them have delivered close to 100% of time and very high quality in the deliveries of fourth quarter.
Next please. Then a short update on the sale of the Mercur and the Venus. Both units are held for sale, the units will be sold straight out or sold in combination with our Songa Offshore Southeast Asia management organization, and we have several interested parties here. And as we said in third quarter we hope or expect it to close in fourth quarter but due to process and slow processes we are not able to do that but none of the interested parties that we talked to in third quarter have left. They are still at the table and we expect to move forward and we expect to come out with some news there going forward. We cannot be specific on we will decide it but we are working very hard on that to close something down there.
Then let’s move to the Songa Dee SPS special periodic survey, and we have established a very strong project organization within Songa in the technical and project division. That division today consists of 45 people. That will grow to 66 people at the end of the year and the SPS will take place in August and September 2014 and will take an estimated 60 days of service including transit to and from the field. We have a budget of $90 million.
We have implemented lessons learned from the last SPSs and we have over the last four months carried out expensive inspections on rig and we have really trained – looked the rig through with offshore organization and scoped up work and that includes today 122 defined work packages and no material steel replacement. We have really focused on scoping and inspecting during the quarter, for the last I would say definitely four months. All long lead items are ordered and on schedule and the yard to execute will be selected imminently.
Next please, status Cat D newbuild project. Look there we see the Songa Equinox and the Songa Endurance at the quay side at the offshore yard at the SME in Korea and we see the significant progress that are being made here. As a side comment we can say that to the one on the left there’s between 1,200 and 1,300 men working every day and on the one to the right we have about 1,000 people working everyday today.
And we are very happy with progress we have seen over the last quarter and we will comment a little bit more in detail on that on the next pages. Okay, next please Cat D newbuild project, no change in delivery cost of the units, no change in the delivery dates reported third quarter. And today we are having a high focus on commissioning the mobilization planning.
Over the past we have had high focus on engineering construction and execution and we are also looking even stronger on mobilization and personnel type, especially for the first Q1. The Songa Equinox core operation team is in place at the yard, Songa and the Songa Endurance team will follow shortly. And we are also having a strong focus on recruitment systems and procedures.
And of course we are continuing with very, very close cooperation with our client Statoil site team and also the operational teams in Norway to prepare for the – of course the Cat’s arrival to Norway.
Looking at the schedule of the Cat D newbuild project if we go to the January the first table there we see that we have a 79.2% construction process of the Equinox, 77.2 on the Endurance and we also see a big progress or large progress being made on Encourage and Enabler going to 22.8, the Encourage going from 38.3 in October to 59.8 in January.
Looking – commenting on the delivery schedule, Equinox and Endurance being delivered in the fourth or being delivered from the yard in the fourth quarter 2014 and Encourage and Enabler being delivered in the second quarter 2015. And yes I think that’s it, let’s move to the next please.
Before I go commenting on this slide I would say that we definitely see lessons learned and obviously the learning curve being made both on the rigs and also on the drilling package, the drilling equipment sets. On the last two we see the yard is really, really walking the learning curve and definitely increase efficiency.
Okay, let’s then go to the Cat D newbuild project on slide 24. The Cat D are constructed according to Statoil’s specifications, thereby reducing the delivery risk considerably. We have a mutual understanding with Statoil that they will accept as much as possible of the rigs before Songa takes delivery of them. That means our commissioning team when we are signing out system-by-system and taking acceptance of that, Songa is in that loop and Statoil in that loop together with Songa. So we have a nice understanding on the construction, this to reduce technical deviations before we take delivery.
The average gross project and mobilization cost about $100 million per unit the average rate ready to drill cost about $660 plus capitalized interests and there is mobilization fee per unit paid to Songa Offshore at the yard delivery.
Then we have on the next page we see the unit. On the left we see them from our perspective everything is moving forward in I would say in this quarter we have been very satisfied with the yard. And if we look to the left we have our units, the number three unit up to the right corner and the mega blocks are floating around on the number four and we expect that to be put in the docks as we see in up in the right corner there and it will start to construct the mega blocks around April, which is very positive.
So all-in-all we are happy with what we see at the yard and we are very happy with our construction team and now also we’ve the operational core teams being present on board the rigs every day we are pretty satisfied with what we see in fourth quarter.
With that I would like to give the word to CFO in Songa Offshore Jan Steinsland.
Thank you, Bjørn we then turn to page 26 and first the wrap up of the refinancing that was completed in December where we raised new equity about $250 million and issued the convertible bond of $150 million with a 4% coupon.
We’ve also made significant amendments to the bond loans, especially we extended the maturity for the NOK750 million loan from June 2015 by 3.5 years through December 2018, and for the NOK 1,400 million loan from November 2016 by 1.5 year to May 2018. The interest rates were reduced in average with 3% and they are now swapped to fixed U.S dollar rates of 7.37 for the smaller loan and 7.73 for the bigger loans.
We also amended the bank fleet loan. That primarily was extended by one year to October 2016 and we also reduced amortization by 50% to $14 million. When we paid the Venus and Mercer the mandatory prepayment is reduced from 120% of the mortgage amount to 50%. Today that means that by a same amount we would repay about $28 million of the loan for that same.
And we also got a new covenant structure in place for all debt. I would say we completed the refinancing in December but we actually also have a small part that is ongoing now and that’s the subsequent equity offering of up to 61 million shares that closes on 24th of February.
Turning to page 27 we have illustrated here the maturity profile of our loan portfolio before and after the refinancing. And we see to the left that we in 2015 we had called a rollout debt and maturity coming against us and that was also at a point where we took delivery of the Cat D. So that was very tricky situation and looking at right hand side we see how we’ve been able to push some of the debt out in time although we’ve had to accelerate some of the debt from to Statoil the $222 million pre-delivery loans Cat D3 and D4 in exchange for higher day rates on all Cat Ds.
We move through page 28 and we have an update on the financing, on the Cat D1 and Cat D2 financing that took a little break during the refinancing so lenders would know how to move forward and what they have to relate to for rest of the Songa Offshore balance sheet. But from January work has been going on and we have moved us or done significant progress. We have aligned financial covenants with all the covenants agreed for the rest of the debt portfolio of the company.
We have also now received credit approval from all vendors, we have previously said that [Taksim] will probably credit approve as they sign the loan agreement but we have now a specific credit approval for Taksim as well and thus from all lenders. The main terms of the financing is that we will have loans of $507 million per rig that is shared on a senior and a junior facility. The average profile will be 10.5 years and the maturity will be six years from delivery.
There are some $103 million available pre-delivery and we will draw that relatively soon after signing of the loan agreement. These $103 million have been very important in pre-refinancing picture. Today they are less important after delivery of the two rigs. As for the closing of the financing, we expect to do that shortly. We for a while, pressed and hoped we will do it before this earnings release. We were not able to do that at an acceptable pace where we worked all necessary details in as that’s required but we expect to get there shortly.
As for financing of Cat D number 3 and 4 we experienced very strong interest now from banks and we see that both the bank market and other markets are open for that financing and we expect to conclude that financing at a higher leverage for the rigs than we did for Cat 1 and 2. And that is of course driven by the refinancing and day rate uplift.
On page 29 we have summarized a little bit on shareholder matters. And as you will note Perestroika AS company owned by Frederik Mohn became majority owner of Songa Offshore during the refinancing transactions. The message from Perestroika is that they will be a long-term industrial strategic owner of Songa Offshore and there are no plans to take the company private. Perestroika will also support a continued open dialogue with all shareholders and other stakeholders, in line with what Songa Offshore has had in the past.
We then go to the financial review of the quarterly financial performance on page 31. And we see that operating revenue came in at $140 million, up $26 million from third quarter. This is primarily due to the fact that the Mercur was on rate during almost the full fourth quarter. It commenced a quarter with ENI on October 9. So it’s been revenue wise a relatively good quarter. We lost some revenue in the first week of October when the Mercur was still undergoing acceptance testing. And we also lost some say $2 million or so from rough weather in the North Sea when we have been on waiting on weather rates rather than full operating rates.
If you turn to – well that concludes, total revenues of $154 compared to $131. The rig OpEx came in at $72 million compared to $66 million in third quarter, up by $6 million. And that is again explained by the Mercur that was mobilizing and acceptance testing in third quarter and had low cost and accumulated some cost in the balance sheet. These costs were then amortized in the fourth quarter over the eniVietnam contract. Going forward none of the rigs have any mobilization cost to amortize sitting in their balance sheet. So it will be a clean OpEx going forward.
On G&A we have seen cost come up quite a bit in fourth quarter, $19 million compared to $12 million in the two previous quarters where the G&A came down to a relatively low level, following some reorganization in the company and Bjørnar and his organization taking over in fourth quarter. We are up to what we should expect to be a more normal level $14 million, $15 million and top of that we have some $4.4 million in non-recurring G&A cost related to severance payments for some individuals leaving the company and some charges related to the refinancing. That brings total cost to $94 million and an EBITDA of $90 million for the quarter but – sorry of $60 million for the quarter, up from about $50 million in previous third quarters. If we take into account the $4.5 million of non-recurring items we have in G&A than a normalized EBITDA here is running at about $64 million.
So while that page was relatively straight forward we have some more interesting items on the page 32, where we go below EBITDA. First depreciation and amortization come in at relatively normal level of $37 million. Then on the next line we have made an impairment on the Mercur and Venus from about $270 million to about $200 million. This is in-line with our message in third quarter when we said that in the sales process we would probably have to take some loss on the book value for those two rigs. And we have written them down to a level of – well it’s a wrong number but it’s also in the neighborhood of what both what we would expect to sell the rigs for and also the recoverable amount in terms of value in use.
On the finance expenses we are up from $9 million to $57 million. And we have several non-cash non-recurring effects in here. And I will go more in detail on that on next page. And the same on the tax charges where we have $32 million of costs bringing us to profit or the loss of the quarter of $137 million or $0.54 per share.
Turning to page 33, we see on the top here that recurring financing expenses are pretty much in-line with previous quarter of $9 million. And it’s also on a cash basis it’s net of capitalized interest of $12 million this quarter, so gross financing expenses were just above $20 million.
If we look at the non-recurring items, they are driven primarily by the fact that bond loan changed substantially during the refinancing both in terms of maturity, interest level and also the net present value of the loans. And this dictated through account the IFRS accounting standards that we need to recognize the loans as new loans in the balance sheet and wash out the existing loans via the P&L. That means again that the entire book loan including capitalized debt insurance fees and other fees capitalized on the loans were expensed. And also the debt issuance or refinancing related to the loans as they stand now were expensed in the quarter.
In addition the swaps were neutralized – the swaps that we had for the 2015 and 2016 loans and we have new Swaps now in pace for the 2018 loans or the both the bond loans.
So this all-in-all, well I am forgetting the last item here that’s the charge of $26 million which is related to the accumulated mark-to-market effect or mark-to-market loss sitting in other comprehensive income in equity that had to leave OCI and via P&L and the charge to the P&L find its place in the equity in the retained earnings line. So that item is through non-cash, through non-recurring and has no impact whatsoever on equity.
So all-in-all here $48 million that were expensed as part of the refinancing and all as a non-recurring and for the $43 million of it as non-cash and $5 million related to refinancing of the loans as cash.
Turning to page 34, we have provided an update on tax charges in the quarter and the two first lines are ordinary corporate and withholding taxes in Malaysia, Singapore and Cyprus that are somewhat higher in fourth quarter than previous quarters as we have come to year-end and had a more thorough assessment of taxes incurred in the year. Then we have also provided a deposit to Australian tax authorities of the excess of $1 million for a certain transfer pricing and depreciation issues that we have an issue with in Australia and we also expect to settle these matters in the same range where the gross claim from the tax authorities were $8 million with penalties and interest on top and we are now working hard to settle it in the amount of $1 million or the deposit made.
In Norway we have I would say now an ordinary charge of $15 million that is related to profits of the year in Norway so it’s related to the entire 2013 and also through some certain gains that are amortizing year-over-year in the Norwegian tax laws. So the $15 million is approximately what you might expect on an annual basis going forward. Although we would like to come back and give further update on this now that we have started to eat our tax loss carry forwards and we will also make sure we will book this on a quarterly basis going forward.
Then we have that item of 15 million it’s a recurring but its non-cash item. Then we have two more non-recurring non-cash items and the first one is that our total tax loss carry forward in Norway have been adjusted somewhat following discussions with tax authorities and also the effect from in isolation good news that taxes that are being reduced by 1% to 27% but that makes the tax loss carry forward less worth so we take it for mainly non-cash charge of that. This adds up into the quarter’s total tax charge of 32 million.
We are turning to page 35 and the balance sheet and short review of that. The current rates are booked at $1.2 million, they are down a little bit from previous quarter from ordinary differentiation partly offset by investments in the quarter while the newbuilds are up $22 million from additional CapEx in the quarter. The deferred tax assets is reduced from $103 million to $77 million based on the Norwegian tax charges and we have a derivative financial instrument which is part of the currency swap for the bond loans of 29 that turns up year in long term assets and that needs to be seen in conjunction with the swap value under non-current liabilities on the next page, that is negative by 64.
What we did was that the two swaps hedging up with the two previous or the one swap as they were with the maturity in ‘15 and ‘16 had to be neutralized so we put one swap in place for that and then we put two swaps in place for that and then we arranged two swaps after that, that hedged out the new exposure to 2018. So we have two swaps going one direction and that are out of the money or liabilities and one swap that is other way and this needs to be booked on a gross basis but if you take some of those two lines and with the bond loans of 342 that you also see in non-current liabilities then you get to the overall value of the loans of 250 for the bigger loan and 125 for the smaller, altogether 275. So that’s a little bit confusing but that’s the way it needs to fit in the balance sheet.
On the current assets there are no big movements except that cash has come up during the refinancing. Total assets closing at about 2.5 billion for the quarter. On the loan side on the banks loan side there have been some changes on page 36. Long term loans have reduced by $86 million to $400 million and that’s primarily due to the fact that 50% of the Statoil $111 million and moved from the current to the non-current or from the non-current to the current liabilities but then the fleet loan the Nordea fleet loan now with a longer maturity has more of itself in the long term parts and less in the short term parts.
So that’s those two effects drives the reduction in long term loans also in addition to the fact that we paid installments during the quarter of $28 million. So long term or non-current liabilities of about $1 billion and on the current liability side there are no big changes except that current portion of the bank loans and other facilities have increased by $54 million, as I said and as Bjørnar said in the beginning we did repay in January about $111 million under the Statoil loan and $50 million under the Swedbank pre-delivery loan in January.
That brings us to the last page under the financial review which is the CapEx and we see on the left hand side that we had a CapEx on the existing rigs of $7 million pretty much in line with the two previous quarter and on the Cat Ds we have CapEx in total of $21 million including capitalized interest of $12 million. So we see the $12 million are a little bit up from the $10 million in the previous quarters. There is of course accumulating values sitting in the rigs under construction accounts but there is also a little bit adjustment at year-end here that makes that kept us interest of $12 million be a little bit higher than the $10 million in the previous quarters.
Now with that I will hand back to Bjørnar, please.
Thank you very much Jan Rune. Okay, let’s then sum up.
Refinancing completed, including improved Cat D dayrates. As Jan Rune just mentioned the balance sheet wash came down accordingly and we had put in place the fundament for Songa going forward. We have a strong contract backlog of $6.6 billion with options worth $8.4 billion. We have a solid operation in the quarter with an operational efficiency close to 100% and EBITDA of $64 million adjusted.
Sale progressing for Songa Venus and the Songa Mercur, we have no change in the Cat D cost or schedule. The financing of the Cat D 1 and 2 credit approved and soon to be completed and good interest for the Cat D 3 and 4 financing with higher volumes. Strong focus in the organization preparing for the Songa D SPS which we expect or who expect to get into yard in August and September this year.
And as I mentioned strong Norwegian market with high barriers of entry related to our contracts or related to other options and when our current fleet are ending.
With that I think we will open up for questions please.
(Operator Instructions). With no questions registered on today’s call I hand the conference back to you.
Thank you very much. I think with that we thank you all for listening in to the Songa fourth quarter 2013 quarterly report. Thank you very much.
Ladies and gentlemen this now concludes today’s webcast. Thank you all very much for attending. You may now disconnect and have a nice day.
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