Electromagnetic Geoservices Asa · OSL:EMGS
Electromagnetic Geoservices Asa — Q1 2016 Earnings Presentation
22 slides from Electromagnetic Geoservices Asa's earnings presentation, May 12, 2016
Slide 1: First Quarter 2016 Results
FIRST QUARTER 2016 RESULTS. Oslo, 12 May 2016 CEO Christiaan Vermeijden, CFO Hege A. Veiseth
Slide 2: Disclaimer
Disclaimer This quarterly presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates
Slide 3: Highlights
Highlights First quarter 2016 • Completion of contract work in India • Two multi-client projects started - West of India (completed in April) - Hammerfest basin, Barents Sea, Norway (completed in April) • Atlantic Guardian on a planned yard stay in February • Reduced E&P caused the market to slow do
Slide 4: Financial review
Financial review Spot the difference.
Slide 5: First quarter key financials
First quarter key financials • Revenues of USD 13.0 million, contract revenues only Quarterly revenues • Operational costs of USD 16.4 million 40 30 - Charter hire USD 1.3 million lower due to Atlantic Guardian idle in January and on yard stay in February (non-recurring) 20 10 - Reversal of a provis
Slide 6: Cost reduction program on track
Cost reduction program on track Quarterly operational cost base development* Comments 50 14 • Cost reduction measures implemented in 2015: 45 12 Lowered the 2016 cost base below USD 85 million 40 35 10 • Further cost reductions implemented in 2016: 30 8 As a result of lower than expected activit
Slide 7: Free cash development
Free cash development 35 • Net decrease in cash of USD 11.8 million • Cash and cash equivalents at end of Q1 of USD 30 25.8 million, incl restricted cash - Restricted cash of USD 5.8 million at end of Q1 (USD 25 2 million provision was released in April 2016) 20 15 Cash covenant of bond loan 10 5 0
Slide 8: Multi-client investments
Multi-client investments Overview of book value of multi-client library (USD million) • Multi-client investments of USD 1.7 million in Q1 20 - West of India 18 - Hammerfest basin, Barents Sea - Purchase of EM data in Mexico (reprocessing ongoing) 16 • Amortisation of USD 2.8 million 14 - New amortis
Slide 9: First quarter operations
aw emegs First quarter operations Spot the difference.
Slide 10: First quarter vessel operations
First quarter vessel operations Atlantic Guardian Q1 2016: Idle January Yard stay February MC project March BOA Thalassa EM Leader Q1 2016: Contract ONGC Jan/ Feb MC project March Laid up from 15 May 2015 10
Slide 11: Proven technology creates value to customers
Proven technology creates value to customers • Wisting Central II discovery yet another confirmation of the benefit of using EM data in the Barents Sea • During Q1, the NPD requested access to EMGS’ regional Barents Sea EM data for APA 2016 11
Slide 12: Settlement with PGS
Settlement with PGS • Entered into a settlement agreement with PGS in April 2016 • Settles all pending litigation between the two companies, i.e. the patents remain valid • Grants PGS a license to the EMGS patent for operation of the current PGS’ Towed Streamer EM system • Grants EMGS a license to t
Slide 13: Market and outlook
aw emegs Market and outlook Spot the difference.
Slide 14: Market update
Market update • Positive oil price development so far in 2016, 64% up Order backlog - limited earnings visibility from December 2015, expected to continue throughout 2016 /2017 as the oil market re-balances* 50 • However, 2016 capex guidance for the largest E&P players 45 represent a 40% decline com
Slide 15: Current opportunities
Current opportunities Norway: • Hammerfest MC campaign completed in April • MC campaign in Norwegian Sea ongoing • Test of JIP expected in Q2/ Q3 Canada: • 23rd licensing round • MC data covering Flemish - Awards/ uplifts expected Q2/Q3 Pass basin available for sale - Late sales expected Q3/ Q4 • An
Slide 16: Summary and outlook
Summary and outlook • Slow market for oil services so far in 2016 • Cost reductions well underway • Restructuring measures ongoing • Market is challenging and characterised by high uncertainty • Healthy interest in EM technology, although challenged by reduced budgets and deferred projects • EMGS is
Slide 17: Questions?
aw emegs Questions? Spot the difference.
Slide 18: Appendix
SPOT THE DIFFERENCE. ppendix Spot the difference.
Slide 19: Consolidated Income Statement
Consolidated Income Statement 19
Slide 20: Financial position
Financial position a 3Lmar.i6 3Lamara5 ASSETS EQUITY [Non-cevent assets Capital and reserves attributable to equity holders Goodwill . ua =| Share capital, share premium and other paid-in equity 319112 287 328 319038 Deferred tax asset : 3008 =| omer reserves 736 (5785) (6416) Mutt-tlent ibrery 4118
Slide 21: Largest shareholders as of 9 May
Largest shareholders as of 9 May # Shareholder Shares Holding 1 SIEM INVESTMENTS INC. 313,769,927 23.92 2 PERESTROIKA AS 279,754,256 21.33 3 MORGAN STANLEY & CO. LLC 180,317,908 13.75 4 ODIN ENERGI 48,562,410 3.70 5 ODIN NORGE 38,709,539 2.95 6 STATOIL PENSJON 30,000,098 2.29 7 SPORTSMAGASINET AS 23
Slide 22: Vessel charters
Vessel charters BOA Thalassa EM Leader Atlantic Guardian Firm Charter 1 April 2017 8 December 2016 18 December 2017 Q1 status In operation, Asia Laid up In operation, Norway Vessel owner BOA Offshore Seatrans North Sea Shipping Flexible rates for when (i) Flexible rates for when (i) Rates in operati
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