Electromagnetic Geoservices Asa · OSL:EMGS
Electromagnetic Geoservices Asa — Q2 2008 Earnings Presentation
33 slides from Electromagnetic Geoservices Asa's earnings presentation, Aug 21, 2008
Slide 1: EMGS ASA Second quarter result 2008
EMGS ASA Second quarter result 2008 CEO, Terje Eidesmo CFO, Svein Knudsen Hotel Continental 21 August 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 Q2
Group highlights Q2 Solid pre-funding of multi-client 3D EM survey in the Barents Sea Contract awarded by StatoilHydro Successful launch of Bridge – tool for integrating EM data with other exploration data Favourable court ruling in Dutch patent dispute in April
Slide 4: Financials
Financials Financials
Slide 5: Financial highlights
Financial highlights USD million Q2 revenues in line with 4 8.4 performance update 45 43.5 37.8 Quarter to quarter fluctuations continues 35 Satisfying revenue mix 28.2 25.9 25 2 3.7 Successful generation of new multi-client market 15 8.8 Increased credit facility to USD 35 million 6.8 5 0.5 A share
Slide 6: Consolidated income statement
Consolidated income statement USD million Quarterly Half year Q2 2008 Q2 2007 YTD 2008 YTD 2007 Rev enues 23.7 37.8 67.2 63.7 Charter hire, fuel and crew expenses 18.7 24.7 38.8 43.6 Employee expenses 10.1 6.7 20.3 17.9 Other operating expenses 8.2 5.8 14.5 9.7 EBITDA *) (13.3) 0.5 (6.5) (7.4) Depre
Slide 7: Condensed balance sheet
Condensed balance sheet USD million As of As of 30 June 2008 30 June 2007 ASSETS Cash and cas h equivalents 14.2 89.5 Trade rec ei vables 39.8 41.8 Other current ass ets 30.5 13.5 Total curr ent assets 84.6 144.9 Intangible assets 3.5 2.2 Property, pl ant and equipment 51.2 32.9 Inves tment in joi n
Slide 8: Operations
Operations
Slide 9: Operational highlights
Operational highlights Operational activity influenced by: • Delayed licensing round in Norway • Contract challenges Operational flexibility utilised: • Yard stay for three vessels • Mobilisation of two vessels in the Barents Sea Operational focus: • Align production capacity with demand
Slide 10: Fleet status
Fleet status M/V Sasha M/V Relume Approximately one Charter expired week yard stay in Q2 20 August Charter expiration: Demobilisation March 2010 M/V Siem Mollie M/V Stad Angler Nearly one month Approximately one yard stay in Q2 week yard stay in Q2 Charter expiration: Charter expiration: March 2010
Slide 11: Market
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Slide 12: World’s largest 3D EM survey in the Barents Sea
World’s largest 3D EM survey in the Barents Sea The world’s largest multi-client 3D EM survey completed in August Heavily pre-funded and covering more than 9,000 km² A total of 30 blocks or all Barents Sea acreage in the Norwegian 20th exploration licencing round covered Multi-client proved as a via
Slide 13: Shallow water breakthrough in Malaysia
Shallow water breakthrough in Malaysia Shallow water contract worth USD 5 million awarded by repeat customer in Malaysia Recently developed new technology will be used in water depths of 60 meters EMGS will assist in both prospect ranking and estimating volumes in several prospects Broadens EMGS’s a
Slide 14: Strategy
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Slide 15: The main challenge
The main challenge Awareness Acceptance Adoption Technology Commercial Full Large scale R&D test adoption adoption adoption adoption Delay or stop High level of technology ACCEPTANCE. Market in early ADOPTION phase
Slide 16: Measures to enhance the commercial adoption
Measures to enhance the commercial adoption Strategy conclusion “Fewer, larger and closer” Actions Stavanger Strengthen business units Showcases Houston Kuala Lumpur Develop the right products Train customers Integration tools (i.e. Bridge) EMGS Business Units Strategic actions will increase ADOPTIO
Slide 17: Technology
Technology ~~ — =
Slide 18: The pioneer and world leader in the EM market
The pioneer and world leader in the EM market Seismic maps structures and boundaries. EM maps what’s inside the layers
Slide 19: Bridge: The EM data integrator
Bridge: The EM data integrator Decision support tool for exploration professionals EMGS data becomes an integrated part of a familiar work environment EM data are now available in the decision process This will create increased demand for EMGS data Supercharging an established workspace with EM
Slide 20: Bridge EM Data Integrator screenshot
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Slide 21: Bridge EM Data Integrator screenshot
[8 Petre! 2008) 4 (Demo. v3. liclost BRIDGE EW Data Integrator] [Find4_SDwin (Any) Se GA Yen Beet Brom! ep
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Slide 24: Patents
Patents
Slide 25: Patent dispute decisions
Patent dispute decisions The Dutch patent court ruled in favour of EMGS in April Another patent hearing at the High Court in London in June/July London patent court decision expected in Q4 2008 EMGS will continually protect its patent position in the interest of its shareholders
Slide 26: Summary
Summary Acceptance of EM technology is strong EM market still in early adoption phase Adoption will pick up as more advanced EM technology is integrated with seismic and other exploration data Multi-client proved to be a viable business model Measures to increase operational efficiency and to enhanc
Slide 27: Outlook
Outlook Share issue will secure our ability to execute growth plans Advanced products like 3D and shallow water acquisiton key to future growth Further develop the multi-client business model Strong focus on international sales and efficient operations Despite the quarterly market fluctuations we re
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 half 2008 2007 Net cash flow from operating activities (18.6) (15.4) Net cash flow from investing activities (14.1) (14.6) Net cash flow from financial activities 6.3 99.0 Net profit (loss) (33.3) (15.3)
Slide 31: 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 32: Why a rights issue?
Why a rights issue? • Secure EMGS the needed financing: Fully underwritten transaction Meet EMGS’ • Equal treatment of shareholders: Rights issue key objectives • Flexibility and value preservation for shareholders: Tradeable subscription rights • The chosen transaction structure gives existing shar
Slide 33: Ownership (as of June 2008)
Ownership (as of June 2008) Shareholder Shares Holding 1 WARBURG PINCUS 46,307,312 62.06% 2 STATE STREET BANK AND TRUST CO. 3,672,105 4.92% 3 JPMORGAN CH ASE 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 JPM
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