Q2 2026 Prosafe SE Earnings Call

August 28, 2026

Speaker #1: 2026 results presentation for Prosafe. My name is Reese McNeel, and I'm the CEO. I have here with me our CFO, Halden. I look forward to running through the presentation today.

Reese McNeel: 2026 results presentation for Prosafe. My name is Reese McNeel, and I am the CEO. I have here with me our CFO, Halvdan. I look forward to running through the presentation today. I will touch a bit on where we are, the key highlights, and the market. Then I will hand it over to Halvdan to discuss a little further on our financial results for the quarter and H1. Very shortly, a little reminder of who we are at Prosafe. Prosafe, we are a leading operator of accommodation units. We have five accommodation units. We have three operating in Brazil, one operating in Australia, and we have one which has a contract for 2027 in the UK. We are headquartered here in Norway, but have a very large operational presence in Brazil and of course, an operation today in Australia.

Speaker #1: I will touch a bit on where we are, the key highlights, and the market, and then I'll hand it over to Halden to discuss further our financial results for the quarter and half year.

Speaker #1: Very briefly, a little reminder of who we are at PROSAFE: PROSAFE is a leading operator of accommodation units. We have five accommodation units.

Speaker #1: We have three operating in Brazil, one operating in Australia, and we have one which has a contract for 2027 in the UK. We're headquartered here in Norway, but have a very large operational presence in Brazil, and, of course, an operation today in Australia.

Speaker #1: Briefly, on the key highlights for the quarter: I'd like to say, first of all, a huge thank you to our entire operation and all of our teams out there.

Reese McNeel: Briefly on the key highlights for the quarter, I would like to say, first of all, a huge thank you to our entire operation and all of our teams out there. We had a very safe quarter, and we had really high operational uptime. We completed the SPS' at the beginning of this quarter. I think coming out the back of the SPS's, you guys did a fantastic job getting the rigs back operational. We had really high uptime, close to 100% commercial uptime on all of the vessels, with the exception of that short period at the beginning where we were finishing these SPS's. So a really good effort by everyone operationally to deliver what I view as a very solid Q2 performance. Liquidity remains high. We had a little bit of draw. Halvdan will come into that, but that was expected on the back of these SPS's.

Speaker #1: We had a very safe quarter, and we had really high operational uptime. We completed the SPSs at the beginning of this quarter, but I think, coming off the back of the SPSs, you guys did a fantastic job getting the rigs back operational.

Speaker #1: And, you know, we had really high uptime—you know, close to 100% commercial uptime on all of the vessels, with the exception of that short period at the beginning where we were finishing these SPSs.

Speaker #1: So, a really good effort by everyone operationally to deliver what I view as a very solid Q2 performance. Liquidity remains high—we had a little bit of a draw.

Speaker #1: Halden will come into that, but that was expected on the back of these SPSs. EBITDA for, you know, close to $10 million for the quarter, and we have actually tightened our guidance looking ahead.

Reese McNeel: EBITDA for close to $10 million for the quarter, and we have actually tightened our guidance looking ahead. We had the guidance from 45 to 55. We have tightened that guidance now from 50 to 55. I will touch a bit more on the market, which we view very positively as I run through these slides here. Where is the fleet, and where are we currently busy? I think one thing to highlight here is the Safe Notos. We are transitioning on to the new contract at a much higher day rate. So we are going from $75,000 to $140,000 a day. That should happen on Tuesday, 1 September, and I think everything is in line for that to move ahead. So that will be very positive looking a bit ahead.

Speaker #1: We had the guidance from 45 to 55. We've tightened that guidance now to 50 to 55. And I'll touch a bit more on the market, which we view very positively, as I run through these slides here.

Speaker #1: Where is the fleet, and where are we currently busy? I think one thing to highlight here is the Safe Notos. We are transitioning onto the new contract at a much higher day rate.

Speaker #1: So we're going from $75,000 to $140,000 a day. That should happen on Tuesday, the 1st of September, and I think everything's in line for that to move ahead.

Speaker #1: So that will be very positive looking a bit ahead. Other vessels, you know, safe and positive operations—and we'll talk a bit about that later—but of course, there's a very key focus on Euris and Zephyrus, and securing additional backlog looking into the back half of '27.

Reese McNeel: Other vessels, safe and positive operations, and we will talk a bit about that later, but of course, there is a very key focus on Eurus and Zephyrus and securing additional backlog looking into the back half of 2027. On the market, I think there has not been any fundamental changes to this market. I think this market remains dominated by everything to do with maintenance and operations. So if we look in this market, where are people operating, where are people delivering a service, it is largely in this area and largely to floating units. There are some hookup jobs. We are working on a hookup job, obviously in Australia. But by and large, this market is driven by supporting FPSOs and older infrastructure for maintenance campaigns.

Speaker #1: On the market, I think there haven't been any fundamental changes to the fund—you know, to this market. I think this market remains dominated by everything to do with maintenance and operation.

Speaker #1: So, if we look in this market, you know, where are people operating, where are people, you know, delivering a service? It is largely in this area.

Speaker #1: And largely to floating units. There are some hookup jobs; we're working on a hookup job, obviously, in Australia, but by and large, this market is driven by supporting FPSOs and older infrastructure for maintenance campaigns.

Speaker #1: And we haven't seen a fundamental shift in this market structure, and I think that remains very positive because we do see globally an increase in FPSOs.

Reese McNeel: We have not seen a fundamental shift in this market structure, and I think that remains very positive because we do see globally an increase in FPSOs, and FPSOs are not getting any younger. I think the market fundamentals here remain very strong. Again, just a very quick reminder, this is largely a market today driven by Brazil. Most of the units are in Brazil. We view a supply picture here of 31, I will touch a little bit onto that, of which almost half of these units are currently operating in Brazil or the South American region. Quick run-through on this. I think this is a very positive slide, along with the next couple. As one of the key takeaways of what is happening in the market today is that there is very limited availability in this market, whether it is actually high-end or even the lower-end units. Everybody is basically busy.

Speaker #1: And FPSOs are not getting any younger. So I think the market fundamentals here remain very strong. Again, just a very quick reminder: this is largely a market today driven by Brazil.

Speaker #1: Most of the units are in Brazil. We've shown a supply picture here of 31. I'll touch a little bit on that. Of these, almost half of the units are currently operating in Brazil or the South American region.

Speaker #1: Quick run-through on this. I think this is a very positive slide, along with the next couple, as, you know, one of the key takeaways of what's happening in the market today is that there's very, very limited availability in this market, whether it's actually high-end or even the lower-end units.

Reese McNeel: I think this is a very positive slide, along with the next couple. As one of the key takeaways of what is happening in the market today is that there is very limited availability in this market, whether it is actually high-end or even the lower-end units. Everybody is basically busy.

Speaker #1: Everybody is basically busy. A couple of units—you know, our unit, for example, the Caledonia—yes, she's warm stacked, but she does have a contract next year.

Reese McNeel: A couple of units, our unit, for example, Safe Caledonia, she is warm stacked, but she does have a contract next year. We see that this market is very tight. We have had dialogue with clients, and I will touch a bit on the next slides, but one of the key drivers here is that clients actually are struggling to find units to meet their demands. This is leading to what we see as one of the tightest markets in over a decade. If you look at how utilization has gone, if we roll back from the back end of the last downturn where utilization was 50%, we are now back up to, if you look particularly at the high-end units from the previous slide, you are pushing again that 80% mark.

Speaker #1: And so, we see that this market is very tight. We have had dialogue with clients, and I'll touch a little bit on that in the next slides. But, you know, one of the key drivers here is that clients actually are struggling to find units to meet their demands.

Speaker #1: And this is leading to what we see as one of the tightest markets in over a decade. So if you look at how utilization has gone, if we roll back from the back end of the last downturn, where utilization was, you know, 50%, we're now back, you know, up to—if you look particularly at the high-end units, you know, from the previous slide, you're pushing again that 80% mark.

Speaker #1: So, you know, utilization has again continued to climb, and we think—and I'll touch a bit on that in the next slide in more detail—but, you know, with several contracts rolling off in 2027 and this tight market, we think this trend will continue.

Reese McNeel: Utilization has again continued to climb, and we think, and I will touch a bit on that in the next slide in more detail, but with several contracts rolling off in 2027 and this tight market, we think this trend will continue. This is a key focus area for us. Again, I mentioned that Brazil is the biggest market here for accommodation, and I think many of you who are watching our market will have seen there was a recent award to our competitor. I think that is taking a unit from actually Australia, taking her to Brazil. I think that is, again, reiterating how good this market is at the moment, that there is demand not only from Petrobras, but there is demands from independent players here for short-term pieces of work or even maybe medium-term pieces of work.

Speaker #1: And this is a key focus area for us. And again, I mentioned that Brazil is the biggest market here for accommodation, and I think many of you who are watching our market will have seen there was a recent award to our competitor.

Speaker #1: I think that is a, you know, taking a unit from actually Australia, taking her to Brazil. I think that's a reiteration, you know, again, reiterating how good this market is at the moment, that, you know, there is demand not only from Petrobras, but there's demands from independent players here for short-term pieces of work, or even maybe medium-term pieces of work.

Speaker #1: So if we look at the likes of Prio, MoDec, you know, potentially the likes of SBM, BW Energy, you know, Karoon as used in the past, Equinor.

Reese McNeel: If we look at the likes of PRIO, MODEC, potentially the likes of SBM Offshore, BW Energy, Karoon Energy has used in the past, Equinor. I think there is a large pool of users of accommodation units in Brazil that is not only Petrobras. Even looking at Petrobras, there are several units rolling off in 2027 and 2028, and to date, they have recontracted too. Our clear expectation, and I think that is what we are seeing in the market concretely with this recent award, is that there will be a lot of recontracting activity, both from Petrobras and independents in the coming months. That is for us a key focus area, but also a key opportunity. As you know, we do have, in Safe Eurus, a vessel rolling off an USD 86,000 day rate, and the market day rates.

Speaker #1: So, I think there's a large pool of users of accommodation units in Brazil that's not only Petrobras. And even looking at Petrobras, there are several units rolling off in 2027 and 2028, and to date, they have re-contracted too.

Speaker #1: So, our clear expectation—and I think that's what we're seeing in the market, concretely with this recent award—is that there will be a lot of re-contracting activity, both from Petrobras and independents, in the coming months.

Speaker #1: And that is for us, you know, a key focus area, but also a key opportunity as, you know, we do have in Euris a vessel rolling off an $86,000 day rate, and the market day rates, as we look on the next slide.

Reese McNeel: As we look on the next slide, the other market day rates have been going, trending up towards the 140-plus mark. I think there is a key opportunity here for us to capture that increase in day rates. Also, outside of Brazil, this market, like I said, half of it is in Brazil, but that means half is outside of Brazil. We have seen also there positive activity. Particularly with the market tight, I think we will continue to see positive activity in other markets as well. Particularly West Africa or Africa in general, has been very active with awards in Nigeria, Angola. You have also seen vessels working in Libya, you have seen vessels working in the Black Sea as well.

Speaker #1: You know, the market day rates have been trending up towards the 140-plus mark. So I think there's a capture of that increase in day rates.

Speaker #1: Also, outside of Brazil, this market—you know, like I said, half of it's in Brazil, but that means half is outside of Brazil. And we have seen also there positive activity, particularly with the market tight.

Speaker #1: I think we will continue to see positive activity in other markets as well. Particularly, West Africa—or Africa in general—has been very active with awards. You know, in Nigeria and Angola, you've also seen vessels working in Libya, you've seen vessels working in the Black Sea as well.

Speaker #1: So I think the market has a little bit more depth than only Brazil, but Brazil is, of course, a key driver to this market when you have half of your vessels—half of the fleet globally—working there.

Reese McNeel: I think the market has a little bit more depth than only Brazil, but Brazil is, of course, a key driver to this market when you have half of the fleet globally working there. Again, I think this is just reiterating the same theme that we have seen the day rate trends, and we have seen an alignment between day rates. Again, higher day rates outside of Brazil. When I mentioned Brazil, 140, 150 in a positive trend globally. They have been a bit higher, but the contract term tends to be lower. We have seen a convergence of day rates over the last period. I think all in all, I think very positive on the market. We have a very key focus on recontracting these two, the two units rolling off in 2027.

Speaker #1: Again, and you know, I think this is just reiterating the same theme that we have seen: the day rate trend, and we've seen an alignment, you know, between day rates again—higher day rates outside of Brazil.

Speaker #1: When I mention Brazil—140, 150, and a positive trend—you know, globally, they've been a bit higher, but the contract term tends to be lower.

Speaker #1: But we've seen a convergence of day rates over the last period. So, all in all, I think we're very positive on the market.

Speaker #1: We have a very key focus on re-contracting these two—the two units rolling off in ’27—but I think, you know, the market’s very, very tight, and we actually do see active re-contracting activity and opportunities.

Reese McNeel: I think the market is very tight, and we actually do see active recontracting activity and opportunities. I think over the coming months, I think we will see this coming to fruition and a clear expectation that this will drive further earnings growth as the rates tick up. Going back a little bit to operations. We talked about this on the last earnings call, but from my perspective, an excellent result again by the team on these SPSs. It was on time, it was on budget, despite many challenges faced conducting these offshore in an offshore environment there in Brazil. Finding a location, getting all the work completed, I think it was an excellent result. Again, on time, on budget. I think, the utilization, as we show here with those behind us, we will see utilization increasing. Caledonia, of course, she will be working next summer.

Speaker #1: So, I think over the coming months, we will see this coming to fruition, with a clear expectation that this will drive further earnings growth as the rates tick up.

Speaker #1: Coming back a little bit to operations, we talked about this on the last earnings call, but, you know, from my perspective, an excellent result again by the team on these SPSs.

Speaker #1: It was on time, it was on budget, despite many challenges faced conducting these offshore, you know, or in the offshore environment there in Brazil.

Speaker #1: Finding a location, getting all the work complete—I think it was an excellent result. And again, on time, on budget. And I think, you know, the utilization, as we show here with those behind us, we will see utilization increasing. And Caledonia, of course—she will be working next summer.

Speaker #1: Backlog—I'm not going to dwell too much on this. Obviously, it's a focus area for us, as I mentioned: Euris and Zephyrus. But, you know, if I look at Boreas, Boreas has been doing fantastic.

Reese McNeel: Backlog, not going to dwell too much on this. Obviously, a focus area for us, as I mentioned, Eurus and Zephyrus. If I look at Boreas has been doing fantastic. We do have six months of options for Boreas in the back half of 2027. Those are callable 90 days ahead of the option. I think so far, work going well. She is operating well and delivering well to the client, and we have to see how those options pan out. We are positively optimistic on Boreas, and I think a key focus for us on Boreas is trying to continue to have her working in Australia. There were three units working in Australia not too long ago. It looks like it is going to be only one unit working there, our unit.

Speaker #1: We do have six months of options for Boreas in the back half of '27. Those are callable 90 days ahead of the option. So I think, you know, so far, work is going well.

Speaker #1: She's operating well and delivering well to the client, and, you know, we have to see how those options pan out. But we're positively optimistic on Boreas, and I think a key focus for us on Boreas is trying to continue to have her working in Australia.

Speaker #1: There were three units working in Australia not too long ago, and it looks like there's going to be only one unit working there—our unit. So, you know, again, knock on wood, that should give us a good opportunity here looking at '27 and beyond.

Reese McNeel: So again, knock on wood, that should give us a good opportunity here looking 2027 and beyond. Caledonia 2027, 2028. We got work in 2027. She has got some options on the back of that. UK, I think there will be work going forward in 2028 and beyond. I am optimistic there that we can also find her some follow-on work in 2028. With that, I think I will hand it over to Halvdan to run through a bit on the financials, and then I will jump back at the very end. Halvdan, over to you.

Speaker #1: Caledonia '27, '28—we've got work in '27. She's got some options on the back of that. UK, I think there will be work going forward in '28 and beyond.

Speaker #1: You know, so I'm optimistic there that we can also find her some follow-on work in '20, '28. So, with that, I think I'll hand it over to Halton to run through a bit on the financials, and then I'll jump back at the very end.

Speaker #1: So Halton, over to you.

Speaker #2: Thank you, Reese, and good morning. Given the stability of operations in the last quarter, there should be no real surprises on the financial side.

Halvdan Kielland: Thank you, Reese, and good morning. Given this stability of operations in the last quarter, there should be no real surprises on the financial side. EBITDA tripled year-over-year. Of course, slightly lower than Q1 due to Caledonia not working and the SPS stays for the Safe Zephyrus and the Safe Notos. As we look towards the Q3 and Q4, we expect this to normalize with the whole fleet working, and of course, the improved day rate from the new Safe Notos contract. On the income statement, most importantly, we continue to be on track for the SG&A target of USD 19 million. In addition to this, the company has a strong focus on both keeping costs low and lowering them even further. Expect this work to continue. Net loss of USD 6.1 million compared to a net loss of USD 23.9 million in Q2 2025.

Speaker #2: EBITDA tripled year over year. Of course, it's slightly lower than Q1 due to Caledonia not working and the SPS days for the Zephyrus and the Notus.

Speaker #2: As we look toward the third and fourth quarters, we expect this to normalize with the whole fleet working— and, of course, the improved day rate from the new Notus contract.

Speaker #2: On the income statement, most importantly, we continue to be on track for the SG&A target of $19 million. In addition to this, the company has a strong focus on both keeping costs low and lowering them even further. Expect this work to continue.

Speaker #2: And net loss of $6.1 million compared to a net loss of $23.9 million in Q2. On the cash flow side, we had a large working capital inflow throughout Q1.

Halvdan Kielland: On the cash flow side, we had a large working capital inflow throughout Q1. As we said on the last call, we expected part of that to flow out, given the timing of the SPS payments. You will see here USD 15 million related to SPS and a USD 22 million negative swing. As we look forward on this, given the SPSs are now firmly behind us, we expect this to even out and normalize with not as many swings going forward. Cash position of USD 52.3 million puts us in a comfortable position, again, with the SPSs behind us and now going into stable operations. Touched on liquidity position, NIBD, and NIBD to last 12 months EBITDA, a slight increase due to the cash drawdown on the quarter. We have repaid some debt. I will get onto that on the next slide. Of course, equity ratio on 27%.

Speaker #2: As we said on the last call, we expected part of that flow out given the timing of the SPS payments. You'll see here €15 million related to SPS and a €22 million negative swing.

Speaker #2: As we look forward on this, given that the SPSs are now firmly behind us, we expect this to even out and normalize, with not as many swings going forward.

Speaker #2: Cash position of $52.3 million puts us in a comfortable position. Again, with the SPSs behind us, and now going into stable operations. Touched on liquidity position, NIBD and NIPT to last 12 months EBITDA—slight increase due to the cash drawdown in the quarter. We have repaid some debt.

Speaker #2: I'll get onto that on the next slide. And, of course, equity ratio at 27%. On the capital structure, we repaid $1.75 million as part of the Euris facility in the quarter, reflected here on the right in 2026.

Halvdan Kielland: On the capital structure, we repaid USD 1.75 million as part of the Eurus facility in the quarter, reflected here on the right in 2026. We continue to pay PIK interest on the senior facility, reflected in a USD 1 million increase in the light blue here. Would like to remind everybody that there is the possibility to extend all the facilities to latest 31 December 2029, given an extension on the Eurus facility. While largely dependent on the recontracting going forward, the company, of course, continues to look at alternatives to optimize the capital structure to further provide value to all stakeholders. Moving on to summary and outlook. We maintain our mark-to-market EBITDA potential of USD 90 million to USD 100 million. We have seen long-term contracts both above and below the reflected level of 140. We continue to see this as very realistic.

Speaker #2: We continue to pay PIK interest on the senior facility, reflected in a $1 million increase in the light blue here. I would like to remind everybody that there is the possibility to extend all the facilities to the latest 31st of December, 2029, given an extension on the Euris facility.

Speaker #2: While largely dependent on the re-contracting going forward, the company, of course, continues to look at alternatives to optimize the capital structure to further provide value to all stakeholders.

Speaker #2: Moving on to summary and outlook, we maintain our mark-to-market EBITDA potential of $90 to $100 million. We have seen long-term contracts both above and below the reflected level of $140.

Speaker #2: We continue to see this as very realistic at 75%, with a reduction of net debt to EBITDA down towards a 2.5 level. Of course, deleveraging—as we've said before—is a high priority for the company.

Halvdan Kielland: Of 75%, with a reduction of net debt to EBITDA down towards a 2.5 level. Of course, deleveraging, as we said before, is a high priority for the company, and we continuously explore ways to lower this figure. Moving on to new builds and trading values. We are now trading in the middle of our broker values. Compared to what we see as replacement cost and expected new build costs for these vessels, we still see, given our current fleet has the potential to produce USD 100 million in EBITDA, we see this as highly unlikely at 12.5x EBITDA. Then not including going forward CapEx, I think you would need to see a substantial uplift in the current market to justify any new vessels coming in here.

Speaker #2: And we continuously explore ways to lower this figure. Moving on to new builds and trading values, we are now trading kind of in the middle of our broker values.

Speaker #2: Compared to what we see as replacement cost and expected new build cost for these vessels, we still see, given our current fleet has the potential to produce $100 million in EBITDA, that this is highly unlikely at 12.5 times EBITDA.

Speaker #2: And then, not including going-forward capex, I think you would need to see a substantial uplift in the current market to justify any new vessels coming in here.

Speaker #2: With that, I think I'll hand it over to Reese for the closing comments and the outlook.

Halvdan Kielland: With that, I think I'll hand it over to Reese for the closing comments and the outlook.

Speaker #1: Yeah, thank you very much, Halton. Touching a bit on some closing comments—and obviously some questions have come in as well as we've been going through this.

Reese McNeel: Yeah. Thank you very much, Halvdan. Yeah, touching a bit on some closing comments and obviously some questions that come in as well as we've been going through this. I think, again, listing our guidance to 50 to 55, I think one of the questions I saw here coming in was, what is a key driver behind that. I think a key driver is that we have successfully completed the SPSs on time and on budget. I think we also see that things have gone very well on Safe Boreas, and we see that we're very well positioned to get on contract with the Safe Notos on time. So I think that's drifting us towards the upper end of that original guidance. So again, by and large, driven from the operational efficiency and then how the team has delivered. We continue to focus on our cost base.

Speaker #1: I think, you know, again, lifting our guidance to 50 to 55, I think one of the questions I saw here coming in was, you know, what is a key driver behind that?

Speaker #1: I think a key driver is that we have successfully completed the SPSs on time and on budget. And I think we also see that things have gone very well on Boreas, and we see that we're very well positioned to get on contract with the Notus on time.

Speaker #1: So I think that's drifting us towards the, you know, the upper end of that original guidance. So again, you know, by and large, driven by the operational efficiency and how the team has delivered.

Speaker #1: And we continue to focus on our cost base. I think we have guided $19 million on EBITDA. I think we're going to hit that—sorry, not EBITDA, $19 million on SG&A for the year.

Reese McNeel: I think we have guided USD 19 million on EBITDA. I think we're going to hit that. Sorry, not EBITDA on not EBITDA. USD 19 million on SG&A for the year, and I think that is We started out the year at about almost pushing 22, and I think we'll easily hit that 19. Then we're also really focused on keeping the operational costs in check. So I think these measures together are pushing us into that upper range. I think we're very well positioned to capture this improving market. I know a lot of questions out there from people. There was two low-spec tenders from Petrobras. I think we did not participate in those two tenders. They were very much focused on the lower spec.

Speaker #1: And I think that is, you know, we started out the year at about, almost pushing 22, and I think we'll easily hit that 19.

Speaker #1: And then, you know, we're also really focused on keeping the operational costs in check. So I think these measures together are pushing us into that upper range.

Speaker #1: I think we're very well positioned to capture this improving market. I know there are a lot of questions out there from people. There were too-high, you know, there were too-low spec tenders from Petrobras.

Speaker #1: I think we did not participate in those two tenders. They were very much focused on the lower spec. I think what's key to note there, though, is that there was still a nice day rate increase on those vessels from where they were to where they have landed.

Reese McNeel: I think what is key to note there, though, is that there was still a nice day rate increase on those vessels from where they were to where they have landed. Our full expectation is that there will be a continued need for high-end vessels, and there are, frankly, not many low-end vessels available in the market. So I think we will see a drive here from Petrobras and for others to seek higher end vessels. I think we just saw that with the award to our competitor as well. So that gives us strong confidence that there will be recontracting from Petrobras or the likes in the coming months. Questions, I think, about demand, overall demand. How do we see demand going further? Will there be an increase in the number of FPSOs? With the increase in FPSOs, do we see an increase in UMSs?

Speaker #1: You know, our full expectation is that there will be a need—a continued need—for high-end vessels. And there are, frankly, not many low-end vessels available in the market.

Speaker #1: So, I think we will see a drive here from Petrobras and from others to seek higher-end vessels. I think we just saw that with the award to our competitor as well.

Speaker #1: So that gives us strong confidence that, you know, there will be re-contracting from Petrobras or the likes in the coming months. Questions, I think, about demand—overall demand—how do we see demand going forward?

Speaker #1: Will there be an increase in the number of FPSOs? You know, with the increase in FPSOs, do we see an increase in UMSs? I think we have seen an increase.

Reese McNeel: I think we have seen an increase already. So if I go back a couple of years, we were talking at one point about 26 vessels in this market, and then 28 vessels, now we are kind of at 31 vessels. So I think we have seen an increase, and again, all of those have been absorbed into the market. So I am optimistic. I think as people say, there are more FPSOs coming into this market, and in addition to that, players are actually slower in taking out older FPSOs, and you see that there is actually more maintenance activity there. So I am optimistic about it, but I am not going to set an exact timeline on when we will see that coming to fruition. But I do think we will see an increasing demand picture going forward a bit further out.

Speaker #1: Alright. So if I go back a couple of years, you know, we were talking at one point about 26 vessels in this market, and then 28 vessels.

Speaker #1: Now we're at around 31 vessels. So, I think we have seen an increase, and again, all of those have been absorbed into the market.

Speaker #1: So, I'm optimistic. I think, as people say, there are new, you know, more FPSOs coming into this market. And in addition to that, players are actually slower in taking out older FPSOs, and you see that there's actually more maintenance activity there.

Speaker #1: So I'm optimistic about it, but I'm not going to set an exact timeline of when we will see that, you know, kind of coming to fruition.

Speaker #1: But I do think we'll see an increasing demand picture, you know, going forward a bit further out. And I think in the near term, this tight demand will keep rate levels decent.

Reese McNeel: I think in the near term, this tight demand will keep rate levels decent. Let me just take one second here. I think that wraps up the presentation, but I will come back and see if there is some questions that have come in. Yeah, I think most of the questions which I see here relate very much to the recontracting picture and the timeline and how it is going to look, and whether it is Petrobras or not Petrobras, or a number of opportunities. I think all I can say there is, again, there is many opportunities in Brazil. I think I listed many of these players who have either historically been using or many of them are actually actively looking to use, whether it is your PRIOs, your MODECs, your Equinors, your Cruz, your BWs.

Speaker #1: Let me just take one second here. I think that wraps up the presentation, but I will come back and see if there are some questions that have come in.

Speaker #1: Yeah, I think most of the questions which I see here relate very much to the re-contracting picture and the timeline and how it's going to look and whether it's Petrobras or not Petrobras or number of opportunities or and I think all I can say there is, again, there's many opportunities in Brazil from, I think I listed many of these players who have either historically been using or are actually many of them are actually actively looking to use you know whether it was you know your Prios, your Motex, your Equinors, your Karuns, your you know I think you know BWs I think these are people who've been users in the past and I think some of them do have you know concrete demands coming forward.

Reese McNeel: I think these are people who have been users in the past, and I think some of them do have concrete demands coming forward. Again, we do think that Petrobras will need these units going forward. But I do not want to speculate on this call exactly what the timing will be or how they are going to structure it or anything like that. So I am not going to speculate on that. Let us see here if there is any other questions. Yeah, what is the timeline for this? I think the best estimate of the timeline is that we think it can be weeks to months. I know it is not particularly concrete, but I think we have seen now recently, stuff starting. They have done two. Now we see the flotel unit. I think our expectation is that in the coming months, we will see more contracting activity.

Speaker #1: And again, we do think that Petrobras will need these units going forward. But I don't want to speculate on this call exactly what the timing will be, or how they're going to structure it, or anything like that.

Speaker #1: So I'm not going to speculate on that. Let's see here if there are any other questions. Yeah, and then, you know, what's the timeline for this?

Speaker #1: You know, I think the best estimate of the timeline is that, you know, we, you know, we think it's we think it's, you know, can be weeks to months.

Reese McNeel: I think the best estimate of the timeline is that we think it can be weeks to months. I know it is not particularly concrete, but I think we have seen now recently, stuff starting. They have done two. Now we see the flotel unit. I think our expectation is that in the coming months, we will see more contracting activity.

Speaker #1: I know it's not particularly concrete, but I think we have seen now recently, you know, stuff start to—you know, they've done two—now we see, you know, the floatel unit.

Speaker #1: I think we're, you know, our expectation is that in the coming months we will see more contracting activity. And, you know, historically we have seen everything from, you know, Petrobras or others being out there a year or more in advance to actually a relatively short timeframe on some of these units, particularly when people were looking at, you know, extensions or, in particular, some of the more independent players in the market tend to have, you know, shorter time spans between issuing a tender and getting something on hire.

Reese McNeel: Historically, we have seen everything from Petrobras or others being out there a year or more in advance to actually relatively short timeframe on some of these units, particularly when people were looking at extensions, and particularly some of the more independent players in the market tend to have shorter time spans between issuing a tender and getting something on hire. I think, yeah, I am not going to speculate too much, but I think it is sort of in that weeks to months category. But the market is very solid. Again, very little supply and a lot of demand pushing, and people actually actively not being able to get units. Just to give a colorful little story, I was with some potential clients back in the summer, and some of them came and said, "Well, Reese, actually, we need a unit now. Don't you have something now?

Speaker #1: So, I think, you know—yeah, I'm not going to speculate too much—but I think it is sort of in that weeks-to-months category.

Speaker #1: But the market is very solid. Again, you know, very little demand and sorry, very little supply and a lot of demand pushing you know and people actually actively you know not being able to get units.

Speaker #1: So, we had a—you know, I was with some clients. Just to give a little color story, I was with some potential clients back in the summer and, you know, some of them came and said, 'Well, Reese, actually, we need a unit now.'

Speaker #1: You know, don't you have something now? Don't you have something for the fall? And we were, you know, we sort of pulled up that slide and said, well, you know, there's actually nothing—nothing really available.

Reese McNeel: Don't you have something for the fall?" We sort of pulled up that slide and said, "Well, there is actually nothing really available." They said, "Well, we have tried other solutions, but it has been very ineffective and very costly, and we have really struggled, so we really want a unit." We sort of said, "Guys, you need to start planning further ahead, because this market is much tighter than you think. So if you really do need a high-end unit or really do need a specific UMS with a passive gangway, you need to be into the market earlier." I think there is a realization there from clients that they need to do that. I think we are going to see more activity in this market. One last check. I think that was it from the questions.

Speaker #1: And they said, well, but you know, we've tried other solutions, but they've been very ineffective and very costly, and we've really struggled.

Speaker #1: So we really want a unit. And we sort of said, you know, guys, you now need to start planning further ahead because, you know, this market is much tighter than you think.

Speaker #1: So if you really do need a high-end unit, or really do need a specific UMS with a gangway—a passive gangway—you need to be into the market earlier.

Speaker #1: So I think, you know, there's a realization there from clients that they need to do that. So I think we are going to see, you know, more activity in this market.

Speaker #1: So, one last check. Oh, I think that was it from the questions. So with that, I would like to thank everyone who joined the call, and look forward to speaking to you at the next quarter.

Reese McNeel: With that, I would like to thank everyone who joined the call, and look forward to speaking to you at the next quarter. Thank you very much.

Speaker #1: Thank you very much.

[Company Representative] (Prosafe): Thank you.

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Q2 2026 Prosafe SE Earnings Call

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