Electromagnetic Geoservices Asa · OSL:EMGS

Electromagnetic Geoservices Asa — Q1 2015 Earnings Presentation

23 slides from Electromagnetic Geoservices Asa's earnings presentation, May 7, 2015

  1. Slide 1: First Quarter 2015 Results

    FIRST QUARTER 2015 RESULTS. Oslo, 7 May 2015, CFO Svein Knudsen

  2. Slide 2: Disclaimer

    Disclaimer This quarterly presenta0on includes and is based, inter alia, on forward-­‐looking informa0on and statements that are subject to risks and uncertain0es that could cause actual results to differ. Such forward-­‐looking informa0on and statements are based on current expecta0ons, es0mates and

  3. Slide 3: Overview first quarter 2015

    Overview first quarter 2015 • Experience progress, but delays in contract nego0a0ons Revenues and revenues/costs per vessel month (USD Million) • Norwegian mul0-­‐client library con0nue to perform well 60 7 50 6 • 23rd licensing round in Norway, EMGS well posi0oned 5 40 • APA rounds provide upli^ rev

  4. Slide 4: Capital Structure

    Capital Structure Balance sheet as at 31.03.15 (USD million) • Cash at USD 38.9 million, up from USD 26.6 million 250 end of previous quarter -­‐ Trade receivables decreased by USD 27.1 million 200 USD 47.9 million to USD 38.5 million -­‐ Trade payables decreased by USD 3.9 million to USD 9.4 millio

  5. Slide 5: First quarter operational overview

    First quarter opera0onal overview BOA Galatea AtlanHc Guardian MC in US Gulf of Mexico MC in Barents Sea, Norway BOA Thalassa EM Leader MC in Asia Contract in Uruguay for BG Group

  6. Slide 6: Vessel utilisation first quarter 2015

    Vessel u0lisa0on first quarter 2015 22% 24% 2% Contract Mul0-­‐client 23% 88% BOA Thalassa BOA Galatea Steaming Other 52% 76% Fleet uHlisaHon 95% 98% Contract: 24% AtlanHc Guardian EM Leader MulH-­‐client: 52% Steaming: 2%

  7. Slide 7: Market and outlook

    Market and outlook Spot the difference.

  8. Slide 8: Multi-client – an important part of EMGS business model

    Mul0-­‐client – an important part of EMGS business model • A proven business model Mul0-­‐client revenues amounted to 31% of 2014 revenues • Increased share of revenue 31% • Access to seismic data important • Crea0ng regional and strategic «hubs» of EM data 69% • Inves0ng in future revenue and incre

  9. Slide 9: Diversified portfolio with different characteristics

    Diversified porkolio with different characteris0cs EMGS mul0-­‐client project porkolio Return targets <2.0x 2.0x – 2.5x >2.5x Prefunding 70-­‐150% 50-­‐70% 0-­‐50% requirements Upli^ poten0al No Some Yes -­‐ Mainly open acreage -­‐ Awarded acreage -­‐ Open acreage -­‐ Regular license rounds -­‐ Fewer

  10. Slide 10: Profitable multi-client investments

    Profitable mul0-­‐client investments Mul0client Key Figures by Vintage Mul0client Key Figures by Region 80 80 180 160 70 70 160 140 140 60 60 120 120 Amounts in USD'(millions) Amounts in USD'(millions) 50 50 100 100 40 40 80 80 30 30 60 60 20 20 40 40 10 10 20 20 -­‐ 0 0 0 2008 2010 2011 2012 2013 20

  11. Slide 11: North and South America region

    North and South America region Uruguay • Contract with BG Group completed 17 April • Total revenue of ~USD 28 million US Gulf of Mexico • Daybreak US GoM • Radiant US GoM • Lightning Bolt US GoM Mexico • Working on both contract and mul0-­‐client opportuni0es • CNH awarded 7 seismic permits • Final

  12. Slide 12: North and South America region – examples from Brazil

    North and South America region – examples from Brazil • Data set from Brazil indicates that EM is a good indicator for predic0ng outcome of wells • >1900 sq.km 3D EM in Sergipe Alagoas basin • 18 well loca0ons within EM sensi0vity window • 11 wells were drilled a?er EMGS published these results in 2

  13. Slide 13: EMEA and Asia

    EMEA and Asia Norway 7324/7-­‐2 7324/7-­‐1 7324/8-­‐1 • Barents Sea/ completed MC campaign • New campaign/ APA related • Deadline for applica0ons 2 September • 23rd licensing round – main driver for sales revenue in Norway in 2015 • Expect related late sales Q2 and Q3 • Up-­‐li^ revenue poten0al Q1

  14. Slide 14: Market update

    Market update Order book (USD million) Contract opportuniHes 140 • Expect to keep one vessel in Asia in 2015 • Opening up of Mexican shelf expected to increase ac0vity 120 • Focus on na0onal oil companies (NOCs), o^en invest 100 through cycles • Target specific areas where IOC budgets are allocated 8

  15. Slide 15: Summary and outlook

    Summary and outlook • Demand for geophysical data has declined in the first quarter and outlook remains uncertain • Delays in contract nego0a0ons, used opportunity to invest in well posi0oned mul0-­‐client projects • Target spesific geographic areas, both contract and mul0-­‐ client, where budgets are

  16. Slide 16: Questions?

    Questions? Spot the difference.

  17. Slide 17: Appendix

    SPOT THE DIFFERENCE

  18. Slide 18: Income statement

    Income statement USD million Quarter ending Year ending 31.03.2015 31.03.2014 31.12.2014 31.12.2013 Contract sales 22.1 46.4 137.2 111.3 Mul0-­‐client sales 10.2 14.9 60.8 33.3 Total revenues 32.3 61.3 198.0 144.6 Charter hire, fuel and crew expenses 7.6 20.6 61.3 51.2 Employee expenses 13.1 15.7 55

  19. Slide 19: Financial position

    Financial posi0on USD million Period ending ASSETS 31.03.2015 31.03.2014 Goodwill 14.4 14.4 Deferred tax asset 3.0 1.9 Mul0-­‐client library 40.1 28.0 Other intangible assets 3.0 2.9 Property, plant and equipment 16.8 24.3 Assets under construc0on 33.2 20.9 Financial assets 2.2 4.0 Total non-­‐curre

  20. Slide 20: Cash flow

    Cash flow USD million Period ending 31.03.2015 31.03.2014 Net cash flow from operaHng acHviHes 28.1 (0.7) Net cash flow from invesHng acHviHes (14.6) (9.7) Net cash flow from financial acHviHes (0.5) 2.2 Net increase/(decrease) in cash 13.0 (8.2)

  21. Slide 21: Largest shareholders (as of May)

    Largest shareholders (as of 6 May) Shareholder Shares Holding 1 SIEM INVESTMENTS INC 22,926,866 11.48 2 PERESTROIKA AS 18,889,449 9.46 3 Morgan Stanley & Co. MS & CO LLC MSCO CLI 18,582,500 9.30 4 ODIN OFFSHORE 9,651,299 4.83 5 CLEARSTREAM BANKING 7,551,706 3.78 6 ODIN NORGE 7,522,609 3.77 7 VERDIPA

  22. Slide 22: Vessel charters and yard stays

    Vessel charters and yard stays BOA Thalassa BOA Galatea Atlan0c Guardian EM Leader Firm Charter December 2015 July 2016 1 March 2016 8 December 2016 Op0ons 1 x 1 year 3 x 1 year 2 x 1 year Vessel owner BOA Offshore BOA Offshore North Sea Shipping Seatrans

  23. Slide 23: Electromagnetics in the E&P workflow

    Electromagne0cs in the E&P workflow Gravity/ Magne0cs Detailed 2D seismic 3D seismic Produc0on data Regional 2D seismic Lease Sale Borehole data 4D seismic Basin Fron0er Explora0on Development Produc0on Abandonment Evalua0on Explora0on Develop play concepts Drilling risk reduc0on Near field explora0on

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