Sed Energy Holdings Plc · OSL:ENH
Sed Energy — SeaBird Exploration — Investor Presentation (January 2015)
62 slides from Sed Energy's investor presentation, Jan 22, 2015
Slide 1: SeaBird Exploration Investor presentation
NOT FOR REPRODUCTION OR DISTRIBUTION. THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO ANY PERSON RESIDENT IN THE U.S., CANADA, AUSTRALIA OR JAPAN OR TO ANY AMERICAN CITIZEN EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT. ANY FAILURE TO COMPLY WITH THESE
Slide 2: Important information
Important information This Presentation has been produced by SeaBird Exploration Plc (the “Company” or “Seabird”) with assistance from ABG Sundal Collier Norge ASA, RS Platou Markets AS and Fearnley Securities (the “Managers”) solely for use at the presentation to investors held in connection with t
Slide 3: Important information con’t.
Important information con’t. IN RELATION TO THE UNITED STATES AND U.S. PERSONS, THIS PRESENTATION IS STRICTLY CONFIDENTIAL AND IS BEING FURNISHED SOLELY IN RELIANCE ON APPLICABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED. THE SHARES HAVE NOT AND
Slide 4: Summary of risk factors
Summary of risk factors Investing in the equity and/or bonds involves inherent risks. Before deciding whether or not to invest in the shares and/or bonds, an investor should consider carefully all of the information set forth in this presentation and otherwise available, and in particular, the speci
Slide 5: Table of contents
Table of contents I. Introduction and transaction overview II. Company description III. Market overview IV. Financials V. Appendix Company’s strategic plan Fleet details Management and Board of Directors THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA, A
Slide 6: I Introduction and transaction overview
I Introduction and transaction overview THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN OR TO A U.S. PERSON ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER U.S. SECURITIES ACT OF 1933, AS AMENDED. ANY FAILURE TO COMPL
Slide 7: Investment highlights
Investment highlights 1 • Outstanding SBX03 bond and Perestroika CL treated equal in conversion 20% to Bond and 80% to equity - converted to equity at NOK 0.3/share Improved capital • Charter hire and bunker payables partially written off, and converted to debt and equity structure • New equity issu
Slide 8: Restructuring background and actions
Restructuring background and actions 1 SeaBird in • SeaBird is in financial distress due to a challenging seismic market financial distress • Shortfall of revenues in 3Q14 and 4Q14e 2 Challenging • Current debt levels too high capital structure • Interest bearing debt above USD 100m too high in trou
Slide 9: The main components in the restructuring
The main components in the restructuring • Current Bond SBX03 of USD 80.9m is partly converted to equity and a new 3-year secured bond (“SBX04”) Equity USD 16.2m rolled into SBX04 Tranche B, with a coupon unchanged at SBX03 USD 64.7m 6.00% USD 80.9m SBX04 USD 64.7m is converted into equity at NO
Slide 10: The equity issue: new share and warrant
The equity issue 1 new share and 1 warrant • New equity of USD 8.5-12m to be raised, current stakeholders has subscribed and underwritten the equity issue: USD 2.26m subscribed for on behalf of SBX03 (the escrow amount 1) USD 1.0m by Ordinat Shipping AS, shareholder and owner of Munin Explorer
Slide 11: Sources and uses & equitization
Sources and uses & equitization Sources of funds Uses of funds Sources of funds USDm Uses of funds USDm New Bond issue 29.3 General corporate purposes 10.7-14.2 Tranche A (new money) 5.0 Debt, Payables & Fees converted to SBX04 24.3 Tranche B (conversion of debt) 24.3 Payables converted to new credi
Slide 12: Interest bearing debt significantly reduced
Interest bearing debt significantly reduced Pre transaction debt level Post transaction debt level 6.1 101.9 62.9 14.9 80.9 USDm 39.0 29.3 2.4 2.1 5.1 SBX03 Perestroika Hawk Lease Total IB debt Debt reduction Total IB debt SBX04 Sec. Credit Unsec. credit Hawk Lease pre transaction post facility faci
Slide 13: Trade payables significantly reduced
Trade payables significantly reduced Trade payables pre(1) and post transaction 22.0 39.7 26.3 - USD 17m in conversion and write-offs USDm - USD 10.7-14.2m from new money used to decrease trade payables over a period of time 5.9 (2) 13.4 1.2 12.0 11.8 0.1 Charter hire Bunker payables Other trade Tot
Slide 14: Total transaction overview
Total transaction overview NOK/USD: 7.60 Debt conversion price: 0.30 NOK New Equity – issue price: 0.10 NOK Ownership post Instruments Post coversion Ownership warrants Credit facility, SBX04 SBX04 pari passu with Unsecured credit EQ value @ Shares Shares Thousand USD Par Value (tranche A) (tranche
Slide 15: Key terms - Senior Secured Bond
See term sheet for further details Key terms - Senior Secured Bond Issuer: SeaBird Exploration Finance Limited Guarantors: All subsidiaries with some carve-outs. See term sheet for further information USD 29.3 million Tranche A: USD 5.0 million Amount: Tranche B: USD 24.3 million Scandinavian
Slide 16: Legal entities
Legal entities SeaBird Exploration PLC Crewing company Management and Operating companies Vessel companies SeaBird Exploration Asia Baruka Management Ltd SeaBird Exploration Norway AS Aquila Explorer Inc Pacific PTE Ltd SeaBird Exploration Biliria Marine Company Ltd SeaBird Exploration FZ LLC (Geo P
Slide 17: Backlog
Backlog Firm contracts Backlog Vessel Expected Expected Amount (USDm) Vessel Client/Project months start-up completion (USD millions) Up to 6 vessels TGS Nopec - Mexico / US East 40 Q1 2015 88 300 coast (MIN program) 273 270 Aquila Explorer Australasia 4 ongoing Mar-15 12 1 vessel North South Americ
Slide 18: Possible vessel allocation 2015-2016
Possible vessel allocation 2015-2016 Vessel 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Aquila Explorer APAC APAC APAC Northern Explorer EAM E NSA NSA NSA Mediterranean Harrier Explorer Source APAC TGS Mexico TGS US East C oast Munin Explorer Seabed Seabed TGS Mexico TGS Mexico TGS US East C
Slide 19: Estimated P&L
Estimated P&L INCOME STATEMENT Multiple Valuation All figures in USD millions Q1 2015e Q2 2015e Q3 2015e Q4 2015e 2015e 2016e 2015 2016 Contract revenue 27.2 37.4 39.7 37.7 142.1 141.8 # of shares 2,826,740 2,826,740 MC revenue 2.0 2.0 2.0 2.0 8.0 16.5 Total revenue 29.2 39.4 41.7 39.7 150.1 158.3 M
Slide 20: Estimated Balance sheet
Estimated Balance sheet BALANCE SHEET All figures in USD millions Q4 2014e Q1 2015e Q2 2015e Q3 2015e Q4 2015e 2015e 2016e ASSETS Non current assets Property, plant and equipment 106.7 103.2 100.7 98.8 98.2 98.2 94.2 MultiClient Investment 20.5 19.1 17.7 16.3 14.9 14.9 21.2 Long term investments 0.1
Slide 21: Estimated Cash flow statement
Estimated Cash flow statement CASH FLOW STATEMENT All figures in USD millions Q1 2015e Q2 2015e Q3 2015e Q4 2015e 2015e 2016e Cash flow generated by/(used for) operations Net profit/ (loss) (5.9) 2.3 4.6 4.4 5.4 28.5 Depreciation, amortization and impairment 7.3 7.4 7.6 7.8 30.1 32.2 Interest expens
Slide 22: II Company description
II Company description THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN OR TO A U.S. PERSON ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER U.S. SECURITIES ACT OF 1933, AS AMENDED. ANY FAILURE TO COMPLY WITH THIS RESTR
Slide 23: SeaBird Exploration
SeaBird Exploration 2D Acquisition 3D Acquisition Source Multi-client Global 2D market 4-8 streamer market Natural fit with fleet composition Optimize fleet utilization Largest fleet Smaller areas; Attractive market trends Capitalize on attractive challenging environments; opportunities shallow wate
Slide 24: Key markets
Key markets Acquisition techniques SeaBird is a service provider across all core seismic markets THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN OR TO A U.S. PERSON ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER U.S.
Slide 25: Well positioned fleet mix
Well positioned fleet mix 2D Fleet 3D Fleet Aquila Explorer Harrier Explorer Northern Explorer Geo Pacific Converted in 2007 Converted in 2007 Upgraded in 2005 Upgraded in 2003 Owned Owned Owned Chartered 6-8 streamers Hawk Explorer Munin Explorer Osprey Explorer Voyager Explorer Converted in 2006 C
Slide 26: Global footprint
Global footprint • Servicing customers globally • Assured vessel access a market differentiator • Critical mass provides optimal service flexibility Harrier Explorer Hawk Explorer Osprey Explorer Voyager Explorer Geo Pacific Munin Northern Explorer Explorer Aquila Explorer THIS DOCUMENT MAY NOT BE D
Slide 27: Blue-chip client base
Blue-chip client base • History of operational excellence ensures blue-chip client base • Leading HSSEQ systems prequalifies the company to work with most oil majors, which sets SeaBird apart from competitors Major oil National oil Independent oil / seismic THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, O
Slide 28: III Market overview
III Market overview THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN OR TO A U.S. PERSON ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER U.S. SECURITIES ACT OF 1933, AS AMENDED. ANY FAILURE TO COMPLY WITH THIS RESTRICT
Slide 29: Global 2D market around $1.2 billion
Global 2D market around $1.2 billion • Contract market; $450–550 million in annual Global 2D market revenues ─ Assumed 80% utilization 16% • Multi-client market; $550-610 million in annual revenues ─ Pre-funding rates average around 40–50% 39% ─ Late sales continue to support revenues and still a vi
Slide 30: 2D market
2D market • E&P spending driving the frontier exploration • Global market approximately $450-550 million¹ • Oil companies and multi-client companies generally accounting for an equal share of market demand • Interest for larger contracts and framework agreements ¹Source: RS Platou Markets THIS DOCUM
Slide 31: Source market
Source market • Global market estimated at $180-230 million¹ • Ocean bottom seismic (OBS) growth fueling the source market – New entrants and new technology driving the OBS market • OBS contracts mainly from major oil companies requiring accreditations • Also seeing increasing demand in long offset
Slide 32: Niche 3D market
Niche 3D market • 4-8 streamer vessels cost efficient for shorter and more complex surveys – Low mobilization costs and short deployment time – More economic on smaller surveys • Natural fit with SeaBird's fleet • Market primarily targeted towards oil companies and require prequalification • Current
Slide 33: Excess 3D supply in 2D market
Excess 3D supply in 2D market • Approximately thirteen vessels up to Vessels removed or converted to source in 2013 12-streamers operating in SeaBird's Vessel Owner/Operator Operational streamer capacity Geo Barents CGG 8 core segments during 2014 Western Pride Western Geco 8 Western Patriot Western
Slide 34: Role of multi-client in industry
Role of multi-client in industry • Multi-client investment is an integral part of seismic operational strategy • Short-term duration of contract surveys, swings in geographic demand and cyclical industry fundamentals result in substantial gaps between contracts and thus unutilized capacity • Given t
Slide 35: Multi-client industry
Multi-client industry • Annual investments exceeding $2.0 billion • Significant increase in investments over past four years Recent sales to investment ratio negatively impacted until investments mature Unclear if industry investment quality effected Risk of unhealthy investments to avoid curr
Slide 36: Market pricing observations
Market pricing observations 2D High end (USD thousand) • Current market softness likely to impact rates and 140 $125 $125 earnings for 2015 120 $110 $110 $110 $110 100 80 $90 $90 $90 $90 $90 $80 60 40 • 2D market demand substantially weaker; however, 20 seeing healthy interest in long term 2D contra
Slide 37: IV Financials
IV Financials THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN OR TO A U.S. PERSON ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER U.S. SECURITIES ACT OF 1933, AS AMENDED. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MA
Slide 38: Historical operating comparison
Historical operating comparison Revenues EBITDA (USD millions) (USD millions) 60 15 50.9 13.2 12.6 50 12 44.7 10.2 40 38.7 33.7 9 30 22.7 6 49.1 3.9 20 41.0 3 33.6 30.5 10 16.4 0 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 0 -3 (2.1) Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Contract revenues Vessel utilization Capital expen
Slide 39: Historical income statement
Historical income statement CONSOLIDATED INTERIM STATEMENT OF INCOME Quarter ended Nine months ended 30 September 30 September All figures in USD millions (except for EPS) Restated Restated 2014 2013 2014 2013 Contract 16.4 49.1 87.9 132.6 Multi-client 6.3 1.8 13.3 5.9 Total revenues 22.7 50.9 101.2
Slide 40: Historical cash flow statement
Historical cash flow statement CONSOLIDATED INTERIM STATEMENT OF CASH FLOW Quarter ended Nine months ended 30 September 30 September All figures in USD millions Restated Restated 2014 2013 2014 2013 Profit/(loss) before income tax (19.5) 3.4 (26.9) 0.1 Non-cash items 16.6 8.9 45.1 26.0 Paid income t
Slide 41: Historical balance sheet
Historical balance sheet CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION As of As of 30 September 31 December All figures in USD millions (except for equity ratio) Restated Restated 2014 2013 2013 Property, plant and equipment 112.9 129.4 122.8 Multi-client library 21.1 6.6 7.1 Other non-curren
Slide 42: Multi-client financial development
Multi-client financial development Multi-client revenues by quarter 8 (USD millions) 6.3 6 5.1 3.7 4 3.2 1.8 2 0 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Pre 2013 surveys 2013/2014 surveys Multi-client book value by quarter 25 (USD millions) 21.1 20 15 12.3 10.7 10 7.1 6.6 5 0 Q3 2013 Q4 2013 Q1 2014
Slide 43: V Appendix
V Appendix THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN OR TO A U.S. PERSON ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER U.S. SECURITIES ACT OF 1933, AS AMENDED. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY C
Slide 44: Company’s strategic plan
Company’s strategic plan THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN OR TO A U.S. PERSON ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER U.S. SECURITIES ACT OF 1933, AS AMENDED. ANY FAILURE TO COMPLY WITH THIS RES
Slide 45: Company vision and aspiration
Company vision and aspiration The most reliable and productive service provider in focus areas, based on low cost operations, experienced crews and unparalleled technology expertise in target segments • Global market leader in our principal sectors for the oil and gas industry and multi-client compa
Slide 46: Strategy
Strategy Three-year plan 1. Continued focus on core operating segments Remain market leader and most productive service provider by continued improvement of marine and seismic operations 2. Renew fleet to maintain global reach and critical mass Fleet renewal through lease of vessels 3. Improve c
Slide 47: 1. Focus on core markets
1. Focus on core markets • Key markets 2D and source Niche 3D; shallow water, complex and smaller survey areas • Preferred service provider for oil and gas industry Only focused 2D service provider pre-approved by oil majors Recognized HSSEQ system assures safety and quality • Continued mark
Slide 48: 2. Critical mass with renewed fleet
2. Critical mass with renewed fleet Global reach and critical mass • Maintain requisite fleet size to uphold market-leading position Optimal fleet size of 7-10 vessels • Global reach essential to efficiently serve customers in all markets • Ability to provide assured vessel access is a market diff
Slide 49: 3. Restructure to improve efficiency and reduce costs
3. Restructure to improve efficiency and reduce costs Restructuring of onshore activities • Consolidate offices to improve efficiency and cost structure – “One company” with primary functions in Oslo • Removing costly expat set-up in Dubai • Reduce onshore headcount and streamline operating function
Slide 50: 4. Multi-client; market stabilizer
4. Multi-client; market stabilizer • Multi-client is a natural extension of existing business profile Stabilize fluctuations in contract market; optimize vessel utilization Capitalize on attractive investment opportunities • Provides significant new expansion platform Multi-client operations t
Slide 51: 5. Technology; taking 2D to the next level
5. Technology; taking 2D to the next level Development of new 2D acquisition technology improves productivity and creates competitive advantage THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN OR TO A U.S. PERSON ABSENT REGISTRATI
Slide 52: 6. Capital structure considerations
6. Capital structure considerations • Need to solidify balance sheet to execute on strategic plan Working capital access required to address cyclicality and growth Flexibility for equipment financing Balance sheet improvement reduces counterparty risk; key to fleet renewal and vendor agreement
Slide 53: Fleet details
Fleet details THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN OR TO A U.S. PERSON ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER U.S. SECURITIES ACT OF 1933, AS AMENDED. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MA
Slide 54: Fleet overview
Fleet overview 2D/Source seismic vessels Owned Chartered Name: M/v Aquila Explorer Name: M/v Hawk Explorer Building year: 1982 Building year: 1984 Conversion date: 2007 Conversion 2006 Ownership: Owned by the Group Ownership: On lease terms until 29 February 2016, when title will be transferred to t
Slide 55: Management and Board of Directors
Management and Board of Directors THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN OR TO A U.S. PERSON ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER U.S. SECURITIES ACT OF 1933, AS AMENDED. ANY FAILURE TO COMPLY WITH
Slide 56: Management
Management Dag Reynolds - Chief Executive Officer • Mr. Reynolds has more than 25 years of experience from the offshore industry. He spent 9 years with PGS before joining SeaBird in 2005 as CEO. He was instrumental in building up the company and listing it on the Oslo Stock Exchange in 2006. Mr. Rey
Slide 57: Board of Directors
Board of Directors Aage Korsvold – Chairman • Mr. Korsvold was appointed as director and chairman of the company in an EGM held on 3 April 2014. Mr. Korsvold is currently a board member of i.a. Timex Group B.V., Vardia ASA, Green Resources AS and Aweco Invest AS. Previous engagements include roles a
Slide 58: Additional risk factors and other considerations
Additional risk factors and other considerations THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN OR TO A U.S. PERSON ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER U.S. SECURITIES ACT OF 1933, AS AMENDED. ANY FAILURE
Slide 59: Risk factors
Risk factors ADDITIONAL RISK FACTORS AND OTHER CONSIDERATIONS In addition to the risks set out in the prospectus for the 2014 equity offering, the risks set out below also apply to the current bond issue. Further, any risks to the operations and financial position of the Group set out hereunder or i
Slide 60: Risk factors cont’d
Risk factors cont’d RISKS RELATED TO THE BONDS The Obligors will assume substantial indebtedness Following the issuance of Bonds, the Obligors will have substantial indebtedness which may limit the flexibility of its operations, its business, its financial capability and its ability to satisfy its o
Slide 61: Risk factors cont’d
Risk factors cont’d The Bond Agreement will contain provisions permitting the Trustee or certain defined majorities to make decisions binding for all bondholders The Bond Agreement will contain provisions for calling meetings of bondholders to consider matters affecting their interests generally. Th
Slide 62: Risk factors cont’d
Risk factors cont’d The enforcement of rights as a bondholder across multiple jurisdictions may prove difficult. The enforcement of rights as a bondholder across multiple jurisdictions may prove difficult. Furthermore, in the event any bondholder’s rights as a bondholder have been infringed, it may
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