26 slides from Electromagnetic Geoservices Asa's earnings presentation, Aug 21, 2014
Slide 1: Electromagnetic Geoservices ASA Second Quarter 2014 Results
ELECTROMAGNETIC GEOSERVICES ASA SECOND QUARTER 2014 RESULTS CEO, Roar Bekker CFO, Svein Knudsen 21 August 2014
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 Second Quarter 2014
HIGHLIGHTS SECOND QUARTER 2014 Operational highlights • First major 3D EM multi-client survey in US Gulf of Mexico extended • Awarded multiple contracts with new and existing customers in Norway • Commenced joint 3D EM multi-client project in southeast Barents Sea with TGS • Partner agreements with
Slide 4: Financial Overview
FINANCIAL OVERVIEW mwemgs
Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS Key figures Q2 Revenues and revenues/costs per vessel month (USD Million) • Revenues of USD 42.5 million 60.00 8.0 50.00 6.0 • EBITDA of USD 10.9 million 40.00 30.00 4.0 • Net loss of USD 2.5 million 20.00 2.0 10.00 Key figures H1 0.00 0.0 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 • Revenue
Slide 6: Vessel Utilisation
VESSEL UTILISATION • Fleet utilisation at 75% 100 - Contract: 38% 90 - Multi-client: 37% 80 • BOA Thalassa (74%) - Completed contract in Morocco 70 - Number of smaller contracts in Norway 60 • BOA Galatea (66%) 50 - Operating for Pemex till end of May - 5 year class renewal 40 • Atlantic Guardian (6
Slide 7: Multi-Client Projects
MULTI-CLIENT PROJECTS Multi-client Q2 highlights Multi-client investments and revenues, per vintage • Sales of USD 7.0 million 80 – USD 3.4 million late sales Investment Total revenue/project Cash contribution – USD 3.6 million pre-funding 70 • Amortisation of USD 2.5 million 60 • Impairment of USD
Slide 8: Capital Structure
CAPITAL STRUCTURE Balance sheet as at 30.06.14 (USD million) Cash and working capital 250 • Cash at USD 40.4 million, down from USD 47.1 million end of previous quarter 200 • Trade receivables increased by USD 61.3 million USD 6.3 million to USD 48.1 million 150 • Trade payables increased by USD 3.9
Slide 9: Operational Overview
OPERATIONAL OVERVIEW mwemgs
Slide 10: Mexico Update
MEXICO UPDATE Opening of the Mexican continental shelf • CNH to manage annual licensing rounds • Round Zero: – Pemex granted 83% of proven and probable reserves – 21% of prospective resources assigned to Pemex – Fiscal terms expected in November 2014 • Round 1: – Expected to include major deep-water
Slide 11: Multi-Client Project in the US Gulf of Mexico
MULTI-CLIENT PROJECT IN THE US GULF OF MEXICO Daybreak project • EMGS’ first major MC project in the US • Multi-year program • 2014 program extended, covering approximately 156 blocks and 3,600 km2 • Access to 2D seismic from TGS US Gulf of Mexico important multi-client basin • Exposure to a wide ra
Slide 12: East Canada Multi-Client Program
EAST CANADA MULTI-CLIENT PROGRAM • Agreement signed with Nalcor Energy* including financial support • Acquisition commenced on 25 July • Expect approximately 3 months, ~4,000 km2 in 2014 and 13,500 km2 in total • Calibrate survey to Flemish Pass Basin where recent major oil discoveries have been mad
Slide 13: EMGS Barents Sea Program
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Slide 14: EM Predictions in the Barents Sea
EM PREDICTIONS IN THE BARENTS SEA • All hydrocarbon bearing reservoirs drilled to date have been highly resistive • Wisting and Hanssen has been correctly Hanssen Wisting A predicted as high resistive reservoirs by EM and has opened up a new oil province B Wisting C • High resolution EM predicted di
Slide 15: Exploration in the Barents Sea
EXPLORATION IN THE BARENTS SEA 300 275 EM anomaly 250 No EM anomaly Recoverable Volumes (MMBOE) 225 200 175 150 All significant discoveries are associated 125 with strong EM anomalies 100 75 50 25 0 Recoverable volumes according to www.npd.no
Slide 16: Strategic Agreement with North Energy
STRATEGIC AGREEMENT WITH NORTH ENERGY Multi-client agreement of NOK 100 million (USD 16.1 million) in January 2014 • Sale of Barents Sea EM data library – payment in convertible bond of NOK 75 million • Sale of consulting services, started in March, payment in cash Convertible bond settled 19 August
Slide 17: Vessel Schedule
VESSEL SCHEDULE Expected vessel schedule as of 20 August 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Apr May June July Aug Sept Oct Nov Dec Jan Feb March BOA Thalassa Norway Asia BOA Galatea Mexico Canada Mexico Mexico Atlantic Guardian NE Norway OMV STL Norway Norway/ Africa EM Leader US GoM Equatorial ma
Slide 18: Market Update
MARKET UPDATE Order book (USD Million) Contract opportunities 2H 2014 140 • Good progress on closing 1 major contract • Final stages of preparing long-term campaign in Asia 120 • Strong leads in southern hemisphere 100 2015 • Increased visibility for opportunities in 80 southeast Asia • EM campaign
Slide 19: Summary and Outlook
SUMMARY AND OUTLOOK Second quarter results according to expectations • Well funded Investments in multi-client libraries in the US Gulf of Mexico, the Barents Sea and Canada • Awarded multiple new contracts in Norway • Important partner agreements with regulating authorities in Uruguay and Canada Ou
Slide 20: Q&A
O&A mwemgs
Slide 21: Appendix
APPENDIX mwemgs
Slide 22: Vessel Charters and Yard Stays
VESSEL CHARTERS AND YARD STAYS BOA Thalassa BOA Galatea Atlantic Guardian EM Leader EM Express Firm Charter December 2015 July 2016 1 March 2016 28 July 2014 Standby in Bergen at no cost to EMGS. Options 1 x 1 year 1 x 1 year 3 x 1 year Optional 1-, 3-, 6- or . 12-month charters until 9 March 2015 Y
Slide 23: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT USD million QUARTER ENDING HALF YEAR ENDING 30.06.2014 30.06.2013 30.06.2014 30.06.2013 Contract sales 35.5 29.6 82.0 49.5 Multi-client sales 7.0 14.8 21.8 26.6 Total revenues 42.5 44.4 103.8 76.1 Charter hire, fuel and crew expenses 13.9 11.7 34.5 22.0 Employee expense
Slide 24: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION USD million QUARTER ENDING ASSETS 30.06.2014 30.06.2013 Goodwill 14.4 14.2 Deferred tax asset 1.9 - Multi-client library 30.2 22.8 Other intangible assets 2.5 4.6 Property, plant and equipment 21.7 27.4 Assets under construction 26.2 17.1 Financial assets
Slide 25: Consolidated Statement of Cash Flow
CONSOLIDATED STATEMENT OF CASH FLOW USD million HALF YEAR ENDING 30.06.2014 30.06.2013 Net cash flow from operating activities 10.1 8.2 Net cash flow from investing activities (26.8) (29.5) Net cash flow from financial activities 1.0 27.0 Net increase in cash (15.7) 5.7 25
Slide 26: Largest Shareholders (as of 20 August)
LARGEST SHAREHOLDERS (AS OF 20 AUGUST) SHAREHOLDER SHARES HOLDING 1 MORGAN STANLEY & CO 19 046 138 9.53 % 2 SKAGEN GLOBAL 10 124 112 5.07 % 3 MOMENTUM INVESTMENTS INC 9 504 920 4.76 % 4 ODIN OFFSHORE 8 473 631 4.24 % 5 VERDIPAPIRFONDET DNB 7 545 383 3.78 % 6 ODIN NORGE 6 160 990 3.08 % 7 FIDELITY FU