Slide 1: SeaBird Exploration Third Quarter Presentation
SeaBird Exploration Third Quarter Presentation 4 November 2016 CEO Christophe Debouvry CFO Nils Haugestad
Slide 2: Forward-looking statements
Forward-looking statements All statements contained in this presentation that are not statements of historical facts, including statements on projected operating results, financial position, business strategy and other plans and objectives for future results, constitute forward-looking statements an
Slide 3: Agenda
Agenda • Highlights • Business review • Financial review • Outlook • Q&A 3
Slide 4: Highlights
Highlights
Slide 5: Highlights
Highlights Financial results • Revenues of $20.4 million ($22.2 million Q2 2016) • Adjusted EBITDA of $6.9 million ($6.8 million Q2 2016) • Adjusted EBIT of $3.1 million ($2.5 million Q2 2016) • Net non-recurring charges of $4.6 million Quarterly observations • Mexico contract substantially conclude
Slide 6: Business review
Business review
Slide 7: Structural transformation – profitability preserved despite challenging environment
Structural transformation – profitability preserved despite challenging environment Revenues - USD million Developments - USD million 200.0 40.0 Cost cutting 35% 180.0 35.0 program initiated 30% 160.0 30.0 140.0 25% 120.0 25.0 20% 100.0 20.0 80.0 15% 15.0 60.0 10% 10.0 40.0 5.0 5% 20.0 - - 0% 1) 1)
Slide 8: Cost structure initiatives
Cost structure initiatives Cost optimization Cost flexibility • Significantly reduced leverage; • Improved cost elasticity improved financial flexibility • Target having 50% of crew cost • Relocation of head office and on flexible contracts reduction in onshore headcount • Ability to scale up and do
Slide 9: Cost and margin development
Cost and margin development 2014 -2016 (first nine months) Key figures first nine months 2014 vs 2016 Cost development - USD million Profitability development 80.0 50% 2014: 44.7% 45% 9 vessels 70.0 67.9 40% 60.0 35% 32.9% 30.9% 50.0 30% 2016: 40.0 38.0 25% 5 vessels 20% 21.2% 30.0 21.5 21.2 15% 20.
Slide 10: Fleet review
Fleet review • Current fleet of five vessels (four active; Munin Explorer warm stacked) • Fleet reduction implemented during the quarter: ‒ Voyager Explorer redelivered September; joint marketing agreement ‒ Decision made to retire Hawk Explorer from the fleet; lowered costs and indebtedness • Conti
Slide 11: SeaBird seismic fleet
SeaBird seismic fleet October 2016 Harrier Explorer Norway Osprey Explorer Denmark Aquila Explorer Bahamas Northern Explorer Bahamas Active SeaBird fleet • Munin Explorer warm-stacked in Bahamas • Voyager Explorer re-delivered in September, joint marketing agreement 11
Slide 12: Segment operating activity
Segment operating activity Contract revenue by survey type Contract revenue by region (USD millions) (USD millions) 35 35 30 26.6 30 26.0 26.6 26.0 25 23.1 25 23.1 21.4 20.4 21.4 0.2 20.4 3.3 0.1 20 20 3.8 15 15 26.6 26.0 26.6 26.0 13.3 10 21.3 22.8 21.3 19.9 10 16.6 5 5 7.2 0 0 0.1 0.1 Q3 2015 Q4 2
Slide 13: Barents Sea MC2D survey
Barents Sea MC2D survey • 3,986 km survey jointly developed with Lundin Norway with additional industry support from Capricorn (Cairn Energy) and Edison Norge • Unique deep subsurface 2D survey covering entire southern Barents Sea • Fast track data estimated available Q1 2017 13
Slide 14: Way forward
Way forward • Mexico Gigante project significant contributor in Q3; three additional survey contracts and one multi-client project during the quarter • Actively pursuing a number of project leads • Significant efforts to reduce costs and improve cost structure flexibility; additional efforts in prog
Slide 15: Financial review
Financial review
Slide 16: Historical operating comparison
Historical operating comparison Revenues EBITDA 30 (USD millions) (USD millions) 27.1 12 26.0 10.7 25 23.2 22.2 10 20.4 8.3 20 7.4 8 6.8 15 6.9 26.6 26.0 6 6.3 23.1 4.6 10 21.4 20.1 4 4.6 3.7 5 2 0 0 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Contract revenues Multi-client revenues Q3 15 Q4 15 Q1 16 Q2 16 Q3 16
Slide 17: Vessel utilization
Vessel utilization Vessel utilization 100% • Q3 utilization of 84%, up from 82% in 7% 90% 10% 10% 16% Q2 2016 7% 8% 80% 7% 5% ‒ Three active vessels working in the NSA region 70% ‒ Two active vessels working in the EAME 60% region 50% 100% 90% 86% 40% 75% 79% • Harrier was utilized on a multi-client
Slide 18: Continued focus on cost reductions and cash flow
Continued focus on cost reductions and cash flow Recurring cost of sales1) Profitability – simplified cash flow (including capitalized multi-client costs) (Adjusted EBITDA - cash MC investment - capex) (USD millions) (USD millions) 35.0 32.7 10.0 7.8 8.0 6.7 30.0 5.6 6.0 4.7 25.0 4.0 3.3 1.9 2.0 0.6
Slide 19: Income statement Q3 2016
Income statement Q3 2016 CONSOLIDATED INTERIM STATEMENT OF INCOME Quarter ended Nine months ended Non-recurring 30 September 30 September Adjusted items All figures in USD millions (except EPS) 2016 2016 2016 2015 2016 2015 Contract 20.1 - 20.1 23.1 67.5 65.0 Multi-client 0.3 - 0.3 0.1 1.1 2.0 Total
Slide 20: Non-recurring items
Non-recurring items Provisions and write-offs P&L impact Figures in USD millions Reporting line Q3 2016 Hawk PPE impairment Impairment 9.9 Hawk lease gain Other financial items, net (1.4) Non-recurring charge retirement of Hawk Explorer Cost of sales 0.5 Total Hawk non-recurring charges 8.9 Non-recu
Slide 21: Cash flow statement
Cash flow statement CONSOLIDATED INTERIM STATEMENT OF CASH FLOW Quarter ended Nine months ended 30 September 30 September All figures in USD millions 2016 2015 2016 2015 Profit/(loss) before income tax (2.9) (1.5) (0.5) 45.8 Restructuring gain - - - (66.4) Other non-cash items 9.6 4.3 15.7 27.7 Paid
Slide 22: Balance sheet
Balance sheet CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION As of As of 31 December 30 September All figures in USD millions (except for equity ratio) 2016 2015 2015 Property, plant and equipment 50.1 71.0 67.4 Multi-client library 2.7 9.5 3.3 Other non-current assets 0.1 0.0 - Inventories 1.
Slide 23: Multi-client update
Multi-client update Multi-client revenues (USD millions) 1.0 0.8 • Multi-client revenues in the quarter of 0.8 $0.3 million 0.6 0.5 ‒ Prefunding for 2016 projects 0.7 0.4 0.2 0.3 0.2 0.1 0.3 0.3 • Multi-client investment of $0.6 million1) 0.0 0.1 0.0 was recognized in the third quarter Q3 2015 Q4 20
Slide 24: Debt profile
Debt profile Funded debt profile Covenants (USD millions) 35 32.8 • Leverage ratio < 2.5 1.2 30.4 30 2.3 1.1 2.1 • Unrestricted cash > $5.0 million 25 • In compliance with both covenants as of 20 30 September 2016 15 29.3 27.2 10 5 0 Face value Book value Bond loan - SBX 04 Secured credit facility U
Slide 25: Decommissioning of Hawk
Decommissioning of Hawk • Acquired Hawk lease for USD 1.1 million – Eliminating substantial lease payments and scheduled class docking – Gain of USD 1.45 million due to settlement amount smaller than booked lease liability • Retaining seismic equipment to be used on other vessels with book value of
Slide 26: Update on provisions
Update on provisions Provisions Reporting line USD millions Beginning balance 1 Jul 2016 8.5 Incurred costs Cost of sales (3.7) Non-recurring charge retirement of Hawk Explorer Cost of sales 0.5 Non-recurring charge redelivery of Voyager Cost of sales 0.4 Non-recurring gain redelivery of Geo Pacific
Slide 27: Outlook
Outlook
Slide 28: Outlook
Outlook • Despite recent improvement in the oil price, oil exploration spending expected to remain depressed and is likely to continue to negatively impact seismic activity in the foreseeable future • The current seismic market softness is expected to continue to impact the seismic sector throughout
Slide 29: SeaBird Exploration
SeaBird Exploration 29