Electromagnetic Geoservices Asa · OSL:EMGS
Electromagnetic Geoservices Asa — Q1 2008 Earnings Presentation
34 slides from Electromagnetic Geoservices Asa's earnings presentation, May 15, 2008
Slide 1: EMGS ASA First quarter result 2008
EMGS ASA First quarter result 2008 CEO, Terje Eidesmo CFO, Svein Knudsen Hotel Continental 15 May 2008
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: Group highlights Q1
Group highlights Q1 USD 10 million contract with Hess Corporation – new client in customer portfolio Extension of contract with PEMEX – new client in end of 2007 Successful verification of scanning product at Troll field Completion of multiclient EM scanning survey offshore India Favorable court rul
Slide 4: Financials
Financials Financials
Slide 5: Financial highlights
Financial highlights USD million 48.4 45 43,5 Promising start and increase in revenue and EBITDA 37.8 35 USD 2.5 million booked on Brazil 28.2 campaign from 2007 25.9 25 Strong growth in scanning and introduction of multiclient generate 15 new markets 8.8 6,8 5 On track for profitable financial 0.5
Slide 6: Consolidated income statement
Consolidated income statement USD million Quarterly Full year Q1 2008 Q1 2007 2007 2006 Revenues 43.5 25.9 140.3 117.7 Charter hire, fuel and crew expenses 20.1 18.8 93.8 62.7 Employee expenses 10.2 11.1 32.9 18.2 Other operating expenses 6.3 3.9 25.7 16.2 EBITDA *) 6.8 (8.0) (12.1) 20.7 Depreciatio
Slide 7: Operations
Operations
Slide 8: Operational highlights
Operational highlights Increase in vessel utilization A good multiclient scanning project secured and completed in India Third concecutive survey for super major Ten times computer power secured in March
Slide 9: Q1 fleet operations
Q1 fleet operations M/V Relume M/V Stad Angler *) M/V Siem Mollie M/V Sasha M/V Atlantic Guardian *) Charter extended to October
Slide 10: Market
Market
Slide 11: Strong industry fundamentals
Strong industry fundamentals High oil price and declining reserve replacement ratio drives exploration spending Longer and stronger cycle in the seismic industry Oil companies more open to use of new technology Source: SEB, Arkwright Full awareness of EM and acceptance is picking up EMGS is in a str
Slide 12: India's 7th New Exploration Licencing Policy round (NELP7)
India’s 7th New Exploration Licencing Policy round (NELP7) Multiclient scanning survey ahead of NELP7 Pre-funded survey performed in cooperation with Directorate General of Hydrocarbons in India India’s biggest auction of offshore blocks The auction is postponed – risk of further delays EMGS sees ad
Slide 13: Multiclient EM survey in the Barents Sea
Multiclient EM survey in the Barents Sea A milestone scanning survey ahead of the Norwegian 20th exploration licencing round The survey is fully pre-funded and covers 3,000 km2 – may be expanded Scanning data gives competitive advantage during the licensing round Target oil companies’ exploration re
Slide 14: Strategy
Strategy
Slide 15: Strong focus on triple A
Strong focus on triple A Full AWARENESS of EM technology EM imaging cited as being a valid technology with growing significance in customer interviews Level of ACCEPTANCE continues to rise Completion of the world’s largest multiclient EM scanning survey offshore India (prefunded) Repeat business is
Slide 16: Crossing the chasm
Crossing the chasm 1 2 3 4 5 Technology Commercial Full Large scale R&D test adoption adoption adoption adoption Basis for start-up of Delay or stop strategy process in fall 2007
Slide 17: Strategies
Ensuring adoption and creating large scale users Technology Commercial Full Large scale R&D test adoption adoption adoption adoption Ensure adoption Large scale users Invest in processing, interpretation and Expand EM application window integration Commercialization of scanning product Strategies De
Slide 18: Overall goal: More focused and integrated
Overall goal: More focused and integrated Current model: Future model: “Opportunistic, Flexible” “Focused, Integrated”
Slide 19: Technology
Technology
Slide 20: The pioneer and world leader in the EM market
The pioneer and world leader in the EM market EM source towed above receivers EM receivers dropped at seabed Seabed logging indicated reserves EMGS uses EM technology to improve offshore exploration success
Slide 21: Troll field, Norway: Proof of 3D and scanning concepts
Troll field, Norway: Proof of 3D and scanning concepts NMVO EMGS has performed a series of 5.3km advanced EM trials on the Troll field One of the objectives was to test 3D and scanning The EM responses matches both the seismic outlines and the well results The clear EM response shows the improved ab
Slide 22: Gippsland Basin, Australia: Proof of scanning concept
Gippsland Basin, Australia: Proof of scanning concept EM responses EMGS has conducted a series of scanning projects over the last years Scanning uses a sparse, wide-azimuth geometry Results show EM responses over a large area, typically one or several blocks Scanning is very suitable for exploration
Slide 23: Promising interest in new products
Promising interest in new products Exploration Development Production Prospect ranking, Lead Prospect Reservoir prospect validation, Appraisal generation identification drill-drop-evaluation monitoring Scanning 3D 4D Relevant to frontier, Relevant to known prospects and fields young and mature basin
Slide 24: Patents
Patents
Slide 25: Dutch patent dispute decision
Dutch patent dispute decision On April 16 the Dutch patent court confirmed: 1.) EMGS was the first company to use EM technology 2.) EMGS can assert its patent position 3.) EMGS can invoke its patents against third parties The court ruling is not a final decision A final decision will by the European
Slide 26: Summary
Summary First quarter provides good momentum into 2008 Scanning product and multiclient services have opened up new markets Scanning contitutes a large portion of sales in Q1 Adoption of EM technology is picking up Strategy ready and detailed action plans laid
Slide 27: Outlook
Outlook Scanning market is expected to grow rapidly Multiclient services also expected to grow Expects further patent challenges following the Dutch patent dispute decision Maintain focus on building market further and on profitable growth in financial year 2008
Slide 28: Q&A
Q&A
Slide 29: Appendix
Appendix
Slide 30: Condensed statement of cash flow
Condensed statement of cash flow USD million First quarter 2008 2007 Net cash flow from operating activities (10.8) (3.0) Net cash flow from investing activities (5.9) (4.1) Net cash flow from financial activities 3.9 (0.6) Net profit (loss) (4.5) (12.3)
Slide 31: Condensed balance sheet
Condensed balance sheet USD million First quarter First quarter 31 March 2008 31 March 2007 ASSETS Cash and cash equivalents 27.9 12.8 Trade receivables 53.1 24.3 Other current assets 28.7 138.7 Total current assets 109.7 175.8 Intangible assets 3.5 2.3 Property, plant and equipment 51.5 25.3 Other
Slide 32: Current fleet
Current fleet M/V Atlantic M/S Siem M/S Sasha Stad Angler OSV Relume Guardian Mollie Date of August 2006 January 2007 January 2007 February 2007 August 2007 refurbishment Charter March 2010 October 2008 August 2008 January 2011 August 2010 expiration
Slide 33: Patent status
Patent status Current patent portfolio includes: - Over 180 cases - 19 patent families - 70 patents granted or applications accepted for grant EMGS has revoked or surrendered a number of patents throughout the years and expects to do so The portfolio relates primarily to the method. Equipment and in
Slide 34: Ownership (as of April 18)
Ownership (as of April 18) Shareholder Shares Holding 1 WARBURG PINCUS 46,307,312 62.31% 2 STATE STREET BANK AND TRUST CO. 2,033,237 2.74% 3 JPMORGAN CHASE BANK 1,820,700 2.45% 4 UBS AG, London branch 1,773,400 2.39% 5 BJARTE BRUHEIM 1,715,302 2.31% 6 MORGAN STANLEY & CO INC 1, 622,564 2.18% 7 JPMOR
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