Media Release                                      11th June 2010 

Neptune Confirms FY2010 Earnings Guidance Following  Stronger Second Half Performance 

• Full year normalized* EBIT expected to be between $5.5 million and $6.5 million • H2 FY 2010 revenues are expected to be $91 million, up 8.3% on H1 2010 

reported revenue of $84 million. • Increased tendering activity across all markets  • Increased IRM activity expected following Gulf of Mexico oil spill  • NMS continues to pursue longer term recurring revenue generating contracts  • Regional Vice President for Asia and the Middle East appointed 

 

Perth, Western Australia: Neptune Marine Services Ltd (ASX: NMS) today announced that  it expects to  report normalised earnings before  interest and  taxes  (EBIT)  for  the year ending  June 30, 2010 of between  AUD$5.5  million  –  AUD$6.5  million.  The  performance  from  February  to  June  2010  is expected to generate normalised EBIT of between AUD$6.5 million ‐ AUD$7.5 million.   

The  result  represents  a  significant  improvement  in  performance  in  the  second  half  of  FY2010 compared to the first half given the normalised EBIT for H1 FY2010 was $0.8 million (reported EBIT for H1 FY2010 was AUD$0.3 million).  

This confirms Neptune’s recovery  in profitability during the second half of FY2010 and the expected return to growth from FY2011 onwards as announced by the company on 21 January 2010. 

The improvement during the second half of FY 2010 is largely attributable to: 

• Increased activity  in the Australian offshore energy  industry due to the development of major LNG projects  in Western Australia, and  in particular,  the  commencement of primary onshore construction.  

• Contract awards and  increasing tender activity  in the Middle East resulting  in  improved vessel utilisation rates. 

• Improved performance in the United States as a consequence of an increasing industry focus on Inspection, Repair and Maintenance (IRM) requirements expected to be further highlighted by the recent Deepwater Horizon incident in the Gulf of Mexico.  

• Depreciation of the Australian dollar against the US dollar.  

Following a significant softening of activity during the first half of FY2010, Neptune  is encouraged by the turnaround in profitability and earnings during the second half.  

*Net of IFRS adjustments. 

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Neptune’s Managing Director  and  CEO,  Christian  Lange  acknowledged  there was  evidence  of  both improved  trading  conditions,  particularly  in  Australia  and  the  Middle  East,  and  an  increasing emergence of prospects across all of its operating locations. 

“Our performance from February 2010 reflects a considerable turnaround in profitability as a result of stronger  conditions  in  our  key markets,  with  the  US  in  particular  showing  signs  of  recovery  and improvement,” he explained.  

“Additionally we are seeing a marked increase in tendering activity, particularly in the last few months, as  the  subsea  construction  and  installation  phases  on  some  of  the  North West  Shelf  oil  and  gas projects  come  into  play.  On  the  Gorgon  Project  for  example, we  are  currently  providing  support services  to  some  of  the  civil  construction works  and we  anticipate  our  involvement  and  scope  of services  will  continue  to  expand  as  the  construction  of  the  project’s  downstream  components progresses. 

“The Middle East  is also an exciting region for us and the successful completion of our first phase of work for Qatargas has resulted in our tendering on significant opportunities which are pending. All of these factors bode very well for Neptune’s ongoing development into FY2011 and beyond,” he added. 

Neptune will update shareholders when appropriate on any material contract awards and extensions and will provide further details on its FY2011 outlook when it reports full year earnings in August.  

 

Further information:

Christian Lange Managing Director & CEO Neptune Marine Services Ltd   Phone: +61 8 9424 1111  

About Neptune Marine Services Limited  Neptune  Marine  Services  (ASX:NMS)  is  one  of  Australia’s  leading  providers  of  engineered  solutions  to  the international oil and gas, marine and renewable energy industries. The company employs more than 600 people in Australia, the UK, USA and Asia and provides a full suite of  innovative services  including subsea and pipeline engineering; commercial diving; specialist fabrication; inspection, repair and maintenance; pipeline stabilisation and protection; ROV and vessel supply; hydrographic surveying and geophysical services; project management; rope access and tension netting  IRM; and the patented NEPSYS® dry underwater welding technology. For more information visit www.neptunems.com 

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Neptune Marine ServicesMarket Presentation

CHRISTIAN LANGEManaging Director & CEO11th June 2010

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Disclaimer

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS - Important Notice and Disclaimer

All information contained in this document (Information) is confidential and provided to you solely for your own information in connection with a proposed placement (Offer) of shares inAll information contained in this document (Information) is confidential and provided to you solely for your own information in connection with a proposed placement (Offer) of shares inNeptune Marine Services Limited (Neptune). This document is provided to you on the condition that you will hold the information in strict confidence and keep it secret, and not reproduce,disclose or distribute the information to any third party in whole or in part without the prior written consent of Neptune.

The Information is being provided to you as, and by receiving this document you represent and warrant that you are: (a) if you are in Australia, a professional investor or sophisticatedinvestor (as those terms are defined in s708 of the Corporations Act 2001 (Cth) (Act); or (b) if you are outside Australia, a person to whom an invitation or offer to subscribe for shares inNeptune and any issue of such share is permitted by the laws of the jurisdiction in which you are situated without the need for any registration, lodgement or other formality.Despite anything stated in this notice or elsewhere in the Information none of the Information (whether considered separately or together) constitutes an offer invitation solicitation adviceDespite anything stated in this notice or elsewhere in the Information, none of the Information (whether considered separately or together) constitutes an offer, invitation, solicitation, adviceor recommendation with respect to the issue, purchase or sale of any shares in Neptune. The Information does not purport to contain all the information that the recipient may require toevaluate an acquisition of shares in Neptune and does not take into account the investment objectives, financial situation or needs of any particular investor. The recipient should conduct itsown independent review, investigation and analysis of Neptune and obtain any professional advice they require to evaluate the merits and risks of an investment in Neptune, before makingany investment decision based on their investment objectives.

Certain statements contained in this presentation may constitute statements about future matters and forward-looking statements. These forward-looking statements are by reference tocircumstances only as of the date of this presentation The forward looking statements involve known and unknown risks uncertainties contingencies and other factors that could causecircumstances only as of the date of this presentation. The forward-looking statements involve known and unknown risks, uncertainties, contingencies and other factors that could causeNeptune’s actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.Neither Neptune, nor any other person, gives any representation, warranty, assurance or guarantee that the occurrence of events expressed or implied in any forward-looking statements inthis presentation will actually occur. This document has been prepared by Neptune based on information available to it. All information in this document is believed to be reliable but none ofNeptune, its related bodies corporate (as defined in the Act), nor any of their respective directors, officers, employees, advisors or representatives (together, Beneficiaries) make anyrepresentation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the Information, including the accuracy, likelihood of achievement orreasonableness of any forecast returns, yields, future income or other statements in relation to future matters. Nothing contained in this document is, or shall be relied upon, as a promise orrepresentation by Neptune or any other Beneficiary whether as to the past present or future To the maximum extent permitted by law the Beneficiaries shall have no liability for any loss orrepresentation by Neptune or any other Beneficiary, whether as to the past, present or future. To the maximum extent permitted by law, the Beneficiaries shall have no liability for any loss orliability of any kind arising in respect of the information contained, or not being contained, in this document.

No action has been taken to register securities of Neptune or otherwise permit a public offering of the securities in any jurisdiction. The securities to be offered and sold in the Offer have notbeen and will not be registered under the US Securities Act of 1933 (the Securities Act). This document does not constitute an offer of securities for sale, or a solicitation of an offer to buysecurities, in the United States or to, or for the account or benefit of, any US person (as defined in Regulation S under the Securities Act) (US Person). Securities may not be offered or soldin the United States or to, or for the account of benefit of, US Persons absent registration under the Securities Act or an exemption from registration under the Securities Act. The distributionof this document outside Australia may be restricted by law In particular this document or any copy of it must not be taken into or distributed in the United States or distributed to any USof this document outside Australia may be restricted by law. In particular, this document or any copy of it must not be taken into or distributed in the United States or distributed to any USperson as defined in the Securities Act. Persons who come into possession of this document should seek advice on and observe any such restrictions. Any failure to comply with suchrestrictions may constitute a violation of applicable securities laws.

By receiving this document, you agree to the above restrictions.

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Contents 

FY10 Earnings Update 

Improving Market Landscape

Regional Strategic Response

Strengthened Management Team

Evolving Capacity

Integrated projects – Qatargas & Gorgon

Opportunities 

Australia’s LNG Potential

Annexure A: Blue Chip Client Base

Annexure B: Business Structure

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FY10 Earnings Update

FY10 earnings guidance update – $5.5 to $6.5m normalised* EBITFY10 earnings guidance update  $5.5 to $6.5m normalised  EBIT

Revenues remain in line with FY09 

FY10 impacted by:12,000

14,000

FY10 impacted by:

o pressure on margins,

o lower than expected vessel tili ti 4,000

6,000

8,000

10,000

000)

utilisation

o the depressed US market 

o and a loss on the Pluto  (2,000)

0

2,000

,

EBIT

A$'

0

fabrication scope

Earnings trending upward in the second half provides basis for improved FY11 performance

(8,000)

(6,000)

(4,000)

Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 FcastO h limproved FY11 performance Other PlutoVessels USANorm EBIT (LHS)

* Less IFRS adjustments

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Improving market landscape

Regions 1st Qtr to 3rd Qtr FY2010 4th Qtr FY2010 and FY2011Regions  1 Qtr to 3 Qtr FY2010 4 Qtr FY2010 and FY2011

AustraliaLower margins experienced due to deep discounting by key competitors in some sectors

Strengthening of the Australian offshore energy industry underpins activity in Neptune’s key marketMajor LNG projects hold significant potential

Asia/ME

Deferral of a large number of IRM projects in SE Asia that negatively impacted on vessel and ROV utilisation ratesLower margins and deep discounting to 

Ongoing recovery in key Asian/Middle Eastern markets evidenced by increase in contracted work, bidding and tendering activity during Q3 and Q4 FY10

g p gmaintain/win market share

FY10

USASudden and significant decline in drilling and exploration activity in the US due to US recession/GFC/collapse in natural gas pricing

Recent Deepwater Horizon incident in Gulf of Mexico expected to result in more stringent IRM requirements for offshore drilling operationsrecession/GFC/collapse in natural gas pricing requirements for offshore drilling operations

UK/ Europe

Increased competition in the fabrication of specialised sub‐sea equipment. The depreciation in the GBP v. AUD has 

Contract wins and increasing tender activity in Neptune’s new target markets eg Libyan contract

Europenegatively impacted reported earnings.Lower margins

Utilisation rates improving

Significant strengthening of the $A (from circa US$0 63 to US$0 90)

Stabilisation of A$ currency against US$Macro/ General

US$0.63 to US$0.90)Cancellation and/or postponement of significant exploration budgets throughout most operating regions

Strong client focus on full service offering and cost of delivery is well suited to Neptune’s service offering

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Regional strategies implemented

Asia/Middle EastAsia/Middle EastAsia/Middle EastAsia/Middle EastRegional VP appointed

Alignment to major development projects, particularly LNG

Entry into new and emerging markets with high potential (Qatar)

UK/ EuropeUK/ EuropeRegional VP appointed

Contracts & Risk Manager appointed

Entry into new and emerging markets with high potential (Libya)

Aberdeen

Burleson

p (Q )g p ( y )

Houston

SingaporeDarwinIndonesia

PERTH(Head office)

USAUSARegional VP appointed

Strategy to focus on partnership/ alignment with asset operators who require various IRM services and guarantee work scopes

AustraliaAustraliaT d i i i i l fid t k t

g p

Decreasing reliance on drilling and exploration

Position the business to take advantage of opportunities that stem from recovering economy

Tendering in an increasingly confident market;

Regional VP appointed

Alignment to major development projects, particularly LNG

Development of inspection capabilities within the IRM sphere

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IRM sphere

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Strengthened management team

NEPTUNE’S REGIONAL VICE PRESIDENTS:NEPTUNE S REGIONAL VICE PRESIDENTS:Recent senior regional appointments to lead delivery of integrated service offering into each target market.

Australia: Decision expected 30th June 2010

A i & Middl E t BENOIT BARBIERAsia & Middle East: BENOIT BARBIERJoined Neptune after almost 30 years with Schlumberger. Brings considerable experience inBusiness Development, Marketing and Operational Management from a range of positionsheld in North America, Asia, the Middle East and North & West Africa.

Europe & West Africa: LO VAN WACHEMJoined Neptune from Subsea 7 where he held the positions of Operations Manager, WestAfrica and Chief Operating Officer, Brazil over a six year period.Africa and Chief Operating Officer, Brazil over a six year period.

Americas: KEN NIMITZJoined Neptune from an 18 year career with Schlumberger spanning Schlumberger OilfieldSer ices Schl mberger O erseas and Schl mberger Well Ser ices Considerable e perience

7

Services, Schlumberger Overseas and Schlumberger Well Services. Considerable experiencein team leadership, mentoring and the management of international operations.

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Australia’s LNG Potential

Significant potential for Neptune to diversify its involvement in thisSignificant potential for Neptune to diversify its involvement in this burgeoning industry sector 

2010 2011 2012 2013 2014 2015 2016+

PLUTOPLUTO

SUNRISESUNRISE

Neptune fabricated of tie in spools and Pluto jacket installation (survey ROV)

GORGONGORGON

BROWSEBROWSEBROWSEBROWSE

ICHTHYSICHTHYS

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WHEATSTONEWHEATSTONE

Capacity for IRM opportunities post construction

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Evolving integrated capacity

2007/08 2008/09 FC 2009/10 FC 2010/112007/08 2008/09 FC 2009/10 FC 2010/11

Simpson Pipeline Replacement Project

NEPSYS® RepairGulf of Mexico

Cable ProtectionHong Kong

Gorgon Project Bids(~$150m)

Survey and ROV construction support

NEPSYS® RepairNorth Sea

Qatar Project Bids(~$150m)

S d ROV j k tCombined services   International NEPSYS® 

Survey and ROV jacket installation support

ConocoPhillips Australia 

Potential(~$40m)

Combined servicesEngineering & 

Combined services Qatargas

Fabrication Bids(~$100m)

IRM Platforms NW Shelf

Combined services Apache Energy

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$8.0m$8.0m $440m$440m9

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Integrated approach ‐ Qatargas

Neptune is focussed on securing longer term projects that deliver more predictable and recurring revenues and to better utilise its multi‐service capability. Neptune has demonstrated this capability via the ongoing work performed for Qatargas (contract value circa $20 million)

VESSELS PIPELINE STABILISATION

HYDROGRAPHICSURVEY DIVING

10ROVs

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Gorgon

For large development projects such Gorgon, there is a long lag time between onshore construction activity and Neptune’s potential participation in subsea construction activity...

Gorgon Project TimelineNMS potential target zone

SEPT 2009ProjectAnnounced

2014First Gas

2010 2011 2012 2013

• Primary OnshoreConstruction

• NMS Support Contracts

• Secondary Onshore Construction• Subsea Construction & Installation

NEPTUNE CONTRACT OPPORTUNITIES INCLUDE:

Fabrication installation & Deepwater Acoustic PositioningUnderwater Construction Fabrication, installation & testing of pipeline spools

Deepwater Acoustic Positioning & ROV Support Services

Underwater Construction In‐water Survey and Inspection 

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Pipeline Installation and Tie‐in Management

Pipeline support and stabilisation

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Opportunities

$Australia’s $200b LNG project developments

• Pluto, Gorgon, Wheatstone, Sunrise, Browse, Ichthys

Qatar Petroleum

• 3 year / 365 days per year

• Q1 FY2011• Q1 – FY2011

Gorgon Subsea Construction Phase ‐ H1:FY2011

US Inspection Program ‐ H1:FY2011

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Annexures

Annexure A: Blue Chip Client Base

Annexure B: Business StructureAnnexure B: Business Structure

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A: Blue Chip Client Base

EPIC ContractorsEPIC ContractorsEPIC ContractorsEPIC Contractors

Oil & GasOil & GasOperatorsOperators

Drilling Drilling ContractorsContractors

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B: Business Structure

Offshore Services

VesselsVessels PipelinePipeline AssetAsset

Engineering Services

DivingDiving Vessels Vessels & ROVs& ROVs SurveySurvey Pipeline Pipeline 

StabilisationStabilisationAsset Asset 

IntegrityIntegrity EngineeringEngineering FabricationFabrication NEPSYS®NEPSYS®

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Engineering Services

FEED, detailed design and IRM capabilities across complete subsea sphere

Perth and Aberdeen facilities and resources (70‐80 engineers worldwide)

Services include:

Pipeline design, modification and repair

Emergency Pipeline Repair Systems

Project engineering  

Project managementProject management

Subsea hardware design

Installation / intervention / operations planning & supervision 

Technical specifications/ PEER review / design assurance

Site representation and QA/ QC

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Fabrication Services

Full range of engineering and fabrication services to the oil &Full range of engineering and fabrication services to the oil & gas, general construction & renewable energy industries

Fabrication bases in Perth and Aberdeen

Fabrication services include:

Design and fabrication of piping, structural and mechanical equipment and subsea structuresequipment and subsea structures

On‐site assembly and installations

Piping and machining

Design, drafting and fabrication of winches, skids, deployment systems & containers

Test and assembly of subsea systemsTest and assembly of subsea systems

Riser handling systems and transportation baskets

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Diving Services

Complete range of commercial diving services to the offshore dindustry

Regional capabilities with bases in Perth, Darwin and Texas

Proven track history and established reputationProven track history and established reputation

Commercial diving resources include:

5 fully certified offshore dive systems in Perth and Darwin

ROV surveys

Test equipment – including UT / CP / Eddy Current and access to ACFM & MPI

Core base of project managers and diving supervisors plusextensive diver resource database

FPSO diver launch and recovery system (doesn’t require welding to deck of facility)FPSO diver launch and recovery system (doesn t require welding to deck of facility)

Geotechnical Coring Rig and Rock Bolting Rig

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NEPSYS®

Dry Underwater Welding TechnologyDry Underwater Welding Technology

Patented in Australia, USA and Europe

Can be applied to repair or structural enhancement

of offshore / subsea assets

Permanent repair solution

h l l ‘ b l ’ d dHigh quality results to ‘as built’ standards

Class approved

Cost effective solutionCost effective solution

Portable and customised to specific application

Minimal impact on operationsp p

Test and training tank facilities in Perth & Texas

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Hydrographic Survey

Provision of a diverse array of offshore marine survey & geotechnical services

Specialised deepwater & geophysical divisions

O ti b d i P th d Ab dOperations based in Perth and Aberdeen

Extensive experience providing:Geophysical and site hazard surveys

Geotechnical surveys

Pipeline route investigation surveys

Multibeam bathymetry surveysMultibeam bathymetry surveys

Subsea and ROV positioning & construction support

Jack‐up and semi‐sub rig move positioning  (for Apache BHPBP & Coogee Resources)(for Apache, BHPBP & Coogee Resources)

Environmental sampling

Consultancy services

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ROV & Vessel Supply

ROV services and subsea tooling solutionsROV services and subsea tooling solutions

Growing fleet of latest technology ROV’s

Owner and operator of offshore vessels to supportOwner and operator of offshore vessels to support 

global construction activities

Assets include:

DP1 MV Neptune ROV Supporter (Asian market)

DP2 AHTS Neptune Trident (International market)

C h i fl f W k d I i Cl ROVComprehensive fleet of Work and Inspection Class ROVs

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Pipeline Stabilisation

Engineering design, manufacture, supply and installationEngineering design, manufacture, supply and installation 

of pipeline stabilisation and protection systems

Operations in Perth, Singapore and Indonesia

Representation in UAE and South Korea

Pioneered ROV installation of pipeline supports

Pipeline protection and stabilisation products:

1. SEAMAT

2 ANCHORMAT2. ANCHORMAT

3. GROUTMAT

4. BITUMAT

Freespan rectification services 

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Asset Integrity

Specialist access solutions and NDT servicesp

Operation based in Perth

Full member of IRATA

Specialist training provider (access and inspection)

Services include:

NDT inspection services

Integrity management

Mechanical fitting and rigging

Pipe fitting, cutting and welding

Fl ti i t d h tFlare tip maintenance and change outs

Tension netting

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