Electromagnetic Geoservices Asa · OSL:EMGS
Electromagnetic Geoservices Asa — Q4 2014 Earnings Presentation
30 slides from Electromagnetic Geoservices Asa's earnings presentation, Feb 5, 2015
Slide 1: Fourth Quarter 2014 Results
FOURTH QUARTER 2014 RESULTS. Oslo, 5 February 2015, CEO Bjarte Bruheim and CFO Svein Knudsen
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: EMGS today
EMGS today • Strong financial position • Flexible and asset-light business model • Revenue-generating assets • 4 vessels in operation • 4 growing multi-client libraries • Proven technology 3D platform • Full-azimuth 3D EM • JIP for next generation EM equipment with Shell and Statoil to further expan
Slide 4: EMGS revenue-generating assets – MC libraries
EMGS revenue-generating assets – MC libraries Canada Norway ~2,500 sq.km ~52,000 sq.km ~USD 9 million invested ~USD 67 million invested ~USD 2.5 million sold ~USD 176 million sold US GoM ~5,400 sq.km ~USD 18 million invested ~USD 7 million sold Brazil ~15,000 sq.km ~USD 15 million invested ~USD 2 mi
Slide 5: EMGS revenue-generating assets – Fleet
EMGS revenue-generating assets – Fleet BOA Galatea Atlantic Guardian Mexico Multi-client project Barents Sea, Norway BOA Thalassa EM Leader Asia Operating in Uruguay
Slide 6: EMGS after 3D EM introduction - a sustainable business
EMGS after 3D EM introduction - a sustainable business Amounts in 1,000 USD 2011 2012 2013 2014 SUM Contract revenue 162 904 176 118 111 284 137 222 587 528 MC Revenue 9 510 24 713 33 314 60 801 128 338 Net Revenue 172 414 200 831 144 598 198 023 715 866 Operating profit 25 139 29 224 -12 285 30 128
Slide 7: Improvements to commercial model
Improvements to commercial model Sales organisation strengthened and tailored to meet • Sales force located close to NOCs exploration needs • Geographic deployment of sales force: - Houston 8 - Oslo - Kuala Lumpur Commercial sales 18 Technical advisor - Mexico Exploration advisor 10 - Brazil Global
Slide 8: Positive development in new customers
Positive development in new customers. 16 14 12 10 8 15 6 4 7 7 2 4 0 2011 2012 2013 2014
Slide 9: Fourth quarter overview
Fourth quarter overview Spot the difference.
Slide 10: Operational highlights fourth quarter 2014
Operational highlights fourth quarter 2014 • Contracts for BOA Thalassa in Malaysia, Thailand and Myanmar • Large contract with BG Group for EM Leader in Uruguay • First sale from multi-client library in Foz do Amazonas in Brazil • Record-high multi-client sales from the Barents Sea library • Commen
Slide 11: Financial highlights
Financial highlights Key figures Q4 Revenues and revenues/costs per vessel month (USD Million) 60 7 • Revenues of USD 52.5 million 50 6 • EBITDA of USD 18.6 million 40 5 4 • Net income of USD 15.1 million 30 3 20 2 10 1 Cost flexibility 0 0 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 • Cost control Contract sales
Slide 12: Vessel utilisation Q4
Vessel utilisation Q4 20% 39% Contract Multi-client 43% 73% 17% BOA Thalassa BOA Galatea Steaming Other 24% 63% Fleet utilisation 57% 74% Contract: 39% Atlantic Guardian EM Leader Multi-client: 24% Steaming: 17%
Slide 13: Capital Structure
Capital Structure Balance sheet as at 31.12.14 (USD million) • Cash at USD 26.6 million, down from USD 42.5 million 250 end of previous quarter - Trade receivables increased by USD 24.1 million USD 48.5 million 200 to USD 65.5 million - Trade payables decreased by USD 1.2 million 150 to USD 13.4 mil
Slide 14: Multi-client increasingly important part of business
Multi-client increasingly important part of business 12% 23% 31% 69% 77% 88% 2012: USD 201 million 2013: USD 145 million 2014: USD 198 million Contract: USD 176 million Contract: USD 111 million Contract: USD 137 million Multi-client: USD 25 million Multi-client: USD 33 million Multi-client: USD 60
Slide 15: Profitable multi-client investments
Profitable multi-client investments Multi-client key figures by vintage Multi-client key figures by region 80 80 160 160 70 70 140 140 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 2014
Slide 16: Market and outlook
Market and outlook Spot the difference.
Slide 17: How to increase the discovery rate
How to increase the discovery rate Geology and Elecromagnetic seismic data data Reservoir √ Trap √ Seal √ Charge √ √ Commercial volume √ √ USD 32bn USD 0.7 bn /4 years / 4 years
Slide 18: Why do we fail in finding hydrocarbons?
Why do we fail in finding hydrocarbons? • Low discovery rate today • 8/9 of 10 exploration wells fail to find commercial levels of Trap 10% Reservoir 15% hydrocarbons Seal 45% • Two main reasons for failure Charge • Lack of seal: 45% 30% • Lack of charge: 30% • Why? • Lack of technology/ measurement
Slide 19: How seismic and EM data complements
How seismic and EM data complements Arbitrary seismic profile from Wisting and the surrounding area
Slide 20: EMGS prioritised multi-client basins going forward
EMGS prioritised multi-client basins going forward Canada Barents Sea US GoM Mexico Brazil
Slide 21: Market update
Market update Order book (USD million) Contract opportunities 140 • Expect to keep one vessel in Asia and one in South-Atlantic in 2015 120 • Opening up of Mexican shelf expected to increase activity • Continue to have a strategic focus on national oil 100 companies (NOCs) 80 • Selected IOCs targete
Slide 22: Summary
Summary • Strong financial positioned and well positioned to meet a challenging business environment, but also act on opportunities • EMGS products well positioned to help oil companies manage through cycle, cut cost and increase efficiency of E&P • Multi-client important part of the business model
Slide 23: Questions?
Questions? Spot the difference.
Slide 24: Appendix
SPOT THE DIFFERENCE
Slide 25: Income statement
Income statement USD million Quarter ending Full year ending 31.12.2014 31.12.2013 31.12.2014 31.12.2013 Contract sales 25.5 40.1 137.2 111.3 Multi-client sales 27.0 4.8 60.8 33.3 Total revenues 52.5 44.9 198.0 144.6 Charter hire, fuel and crew expenses 15.8 20.3 61.3 51.2 Employee expenses 12.7 12.
Slide 26: Financial position
Financial position USD million Period ending ASSETS 31.12.2014 31.12.2013 Goodwill 14.4 14.4 Deferred tax asset 3.0 3.2 Multi-client library 33.8 28.1 Other intangible assets 3.2 3.4 Property, plant and equipment 19.2 27.7 Assets under construction 31.2 19.2 Financial assets 4.8 - Total non-current
Slide 27: Cash flow
Cash flow USD million Full year ending 31.12.2014 31.12.2013 Net cash flow from operating activities 31.7 51.9 Net cash flow from investing activities (59.5) (45.3) Net cash flow from financial activities (2.3) 9.5 Net increase/(decrease) in cash (30.1) 16.0
Slide 28: Largest shareholders
Largest shareholders (as of 4 February) Shareholder Shares Holding 1 SIEM INVESTMENTS INC 22 926 866 11.48 % 2 PERESTROIKA AS 17 889 449 9.46 % 3 Morgan Stanley & Co 18 576 200 9.30 % 4 ODIN OFFSHORE 9 651 299 4.83 % 5 VERDIPAPIRFONDET DNB 7 724 114 3.87 % 6 ODIN NORGE 7 272 410 3.64 % 7 CLEARSTREAM
Slide 29: Vessel charters and yard stays
Vessel charters and yard stays BOA Thalassa BOA Galatea Atlantic Guardian EM Leader Firm Charter December 2015 July 2016 1 March 2016 8 December 2016 Options 1 x 1 year 3 x 1 year 2 x 1 year Vessel owner BOA Offshore BOA Offshore North Sea Shipping Seatrans
Slide 30: Electromagnetics in the E&P workflow
Electromagnetics in the E&P workflow Gravity/ Magnetics Detailed 2D seismic 3D seismic Production data Regional 2D seismic Lease Sale Borehole data 4D seismic Basin Frontier Exploration Development Production Abandonment Evaluation Exploration Develop play concepts Drilling risk reduction Near field
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