Magseis ASA Q2 2017 18th August 2017 Highlights Strong - - PowerPoint PPT Presentation

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Magseis ASA Q2 2017 18th August 2017 Highlights Strong - - PowerPoint PPT Presentation

Feb 24, 2024 392 likes •590 views

Magseis ASA Q2 2017 18th August 2017 Highlights Strong financial performance: Revenue of USD 19.4m and EBITDA of USD 8.4m Another strong quarter Working capital increase from operational growth and payment terms in the contract

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SLIDE 1

Magseis ASA Q2 2017

18th August 2017

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SLIDE 2

Highlights

Another strong quarter Operational Performance 2 Crews Continuous focus on more efficient and cost effective solution Further growth, backlog and outlook

2
  • BGP/Aramco and ConocoPhillips are very satisfied with our performance and
we expect additional work to be awarded
  • Contractual negotiations for new cable vessel ongoing, Q2 2018 start-up date
unchanged, 6000 new MASS nodes already in production
  • Strong financial performance: Revenue of USD 19.4m and EBITDA of USD 8.4m
  • Working capital increase from operational growth and payment terms in the contract
  • Mobile ROV more efficient than expected, demonstrated applicability for
a larger share of the OBS market than anticipated
  • Test of new shooting technology to improve efficiency planned during Q3
  • Two simultaneous operations for the first time (one cable and one ROV)
  • Very strong performance on the S-78 Extension and ConocoPhillips Eldfisk projects
Source: Magseis
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SLIDE 3 KEY F Y FIGURES Q2

Q2 2017

17 Source: Magseis

19.4

REVENUE

8.4

EBITDA

3.3

NET INCOME

33.7

CASH BALANCE

$ MILLION $ MILLION $ MILLION $ MILLION $ MILLION

19.4 7.7 8.4

REVENUE

Q2 2017

REVENUE

Q2 2016

EBITDA

Q2 2016

EBITDA

Q2 2017

  • 1.6
3
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SLIDE 4

Second quarter and first half 2017

  • Key figures
4 Source: Magseis Revenue 19 399 7 671 40 475 25 786 Cost of sales 8 659 5 903 18 656 19 532 EBITDA 8 398
  • 1 578
16 727
  • 19
EBIT 4 711
  • 3 546
9 472
  • 6 032
Net profit/loss 3 313
  • 3 970
6 823
  • 7 912
Basic earnings per share 0.05
  • 0.25
0.11
  • 0.12
Financial position Cash 33 657 16 855 Working Capital1) 17 359
  • 4 238
Total equity 95 069 57 563 Equity ratio 78.6% 66.4% Gross interest bearing debt 9 752 6 329 Cash flow Profit and loss Q2 2017 Q2 2016 YTD 2017 YTD 2016 1): Working Capital defined as Trade Receivables less Trade Payables Net cash from operating activities
  • 9 481
  • 5 461
592
  • 3 928
Net cash from investing activities
  • 8 827
  • 8 399
  • 18 276
  • 10 714
Net cash from financing activities
  • 2 228
15 497 32 367 20 062
  • USD 19.4 million in Revenues
  • Higher than expected due to strong operational performance
  • n both Red Sea and ConocoPhillips projects
  • USD 1.5m of paid standby incurred during the quarter
  • Very strong EBITDA performance at USD 8.4 million
  • Capitalised 10 day yard stay during April (USD 2.0m reduction)
  • Total Amortisation of USD 2.8m during the quarter
  • Closing cash position of USD 33.7 million
  • Equity ratio of 78.6%
  • Working Capital increase
  • Reversion to more normalised payment terms from BGP
  • Increased revenue base
  • Low level of payables
  • Full-year guidance re-iterated
  • Expected EBITDA for 2017 of > USD 20m
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SLIDE 5

OBS provides superior image quality

  • gaining market share over high-end streamer seismic

Streamer Seismic Ocean Bottom Seismic (OBS)

80%

Market share

20%

Market share

5 Source: Magseis/Statoil
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SLIDE 6

MASS technology - Marine Autonomous Seismic System

Miniaturised node sensors Handling system Applications

ROV deployment Ultra deep water deployment Cable deployment

6
  • Highest spec sensor
  • n the market
  • Smart, light, robust and

easy-to-handle node

  • Superior logistics

and efficiency

  • Automated handling system
Cable ROV Node Deployer Source: Magseis
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SLIDE 7

Larger spread driving substantial cost reductions

100K

$ per.km²

25K

$

per.km²

2014 75km 2015 150km 2016 350km 2018 >600km

Cable length

Large spreads - rolling operations

Multiple patch deployment 7 Source: Magseis
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SLIDE 8 Source: Magseis

S-78 Extension Red Sea

8

Operational highlights

  • Smooth transition from S-78 to the S-78 Extension due to good coordination with BGP

and implementation of new MASS technology

  • Very strong operational performance during May and June
  • Excellent cooperation with BGP’s transition zone crew
  • Strong operational performance continued into Q3
  • Expected completion of current survey Late Q3/Early Q4 2017
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SLIDE 9 Source: Magseis, NASA

Red Sea Exploration

9

Saudi Aramco was the first to use a deepwater rig in the Red Sea region after a 15-month seismic study in 2009 indicated the presence of natural gas. The company discovered three oil and two gas fields in 2013.

(Abdelghani Henni, HartsEnergy)

“We continue our program to explore the shallow waters of the Red Sea, completing our largest single survey of the seabed encompassing Saudi Arabian territorial waters,” Saudi Aramco said in its latest annual report (2016).

(Abdelghani Henni, HartsEnergy)

State-owned Saudi Aramco is hoping that innovative seismic acquisition technology will help the company to successfully explore the geologically complex sub-salt of the ecologically sensitive Red Sea. The operator had said its share of Red Sea oil and gas resources had the potential to boost Saudi Arabia’s reserves base by more than 30%.

(Saleh Al Saleh, Upstream online) Red Sea
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SLIDE 10

ConocoPhillips Eldfisk project

10
  • First full scale Mobile ROV operation
  • 3000 MASS nodes and 2 ROVs
  • Project on-track to complete within schedule and budget
  • Using ROV vessel and Source vessels already on charter

with ConocoPhillips

  • Delivering a high-quality 4D OBS survey to our client

at a substantially lower cost

  • Operational efficiency can be improved further by

deploying more MASS nodes and faster ROVs

Source: Magseis
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SLIDE 11

MASS Modular

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High capacity, mobile ROV operation

  • Containerised, modular system
  • Can be rigged up/down within 1 week on vessels
  • f opportunity or onshore
  • Unlimited number of nodes can be deployed
  • Efficiency comparable to high-end cable based

deployment platforms

  • Commercially available from Q3 17, strong interest

from clients

Source: Magseis
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SLIDE 12

Crew #3 preparations ongoing

Source: Magseis 12
  • Charter negotiations in final stages
  • Focus on securing a good long-term agreement
  • 6,000 MASS sensors in production, long-lead components for handling system ready to be ordered
  • Detailed design for chosen vessel ongoing
  • Target start of operations during Q2 2018
  • Bidding on projects for 2018 North Sea season
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SLIDE 13

Ramping up capacity to meet market growth:

Source: Magseis 13
  • MASS node inventory growing from 5,000 to 14,000 by Q1

2018

  • Critical long-lead components for an additional 6,000 has

been secured, enabling Magseis to reach 20,000 MASS nodes by YE 2018

  • Firmly establishing Magseis as a joint industry leader in terms
  • f OBS node capacity
  • Strategic focus on maximizing the utilisation of our MASS

nodes and Return On Capital Employed

– Carefully managing the proportion of modular ROV crews vs. dedicated cable crews 2016 30 000 25 000 20 000 15 000 10 000 5000 2017 2018

MASS Node Inventory

2019 Committed orders for complete MASS nodes Secured, critical long-lead items
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SLIDE 14

Strong market outlook

2020 2019 2018 2017 2005 2016 2 250 2 000 1 575 1 500 1 250 1 000 750 500 250 Source: Magseis/Arkwright/Rystad Energy/Statoil 14

USD >750 m

$ MILLION

OBS market drivers

IOR Focus Increasing geological complexity Technology development Customer confidence & adoption
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SLIDE 15

Second quarter and first half 2017

  • Comprehensive income
  • Revenue
  • USD 19.4m, strong performance on the Aramco S-78 and
ConoccoPhillips projects
  • Cost of sales
  • Full quarter of production
  • Amortisation of capitalised mobilisation and yard costs
(net effect of USD 0.8m during Q2)
  • Lower Cost of Sales due to fuel provided on survey
(Q2 2016 also included source vessel costs)
  • Depreciation
  • Amortisation of capitalised mobilisation and yard cost USD 0.4m
  • Amortisation and Impairment
  • No impairment in the second quarter
  • Finance
  • Primarily interest related to BGP pre-funding, GIEK and
Innovation Norway
  • BGP pre-funding repaid
  • Tax
  • USD 0.8m for withholding tax in Saudi Arabia
In USD thousands Q2 2017 (unaudited) YTD 2017 (unaudited) Q2 2016 (unaudited) YTD 2016 (audited) 15 Revenue 19 399 40 475 7 671 25 786 Cost of sales 8 659 18 656 5 903 19 532 Research and development 514 1 013 769 1 261 SG&A and other expenses 1 828 4 079 2 578 5 012 EBITDA 8 398 16 727
  • 1 578
  • 19
Depreciation 3 572 6 791 1 580 4 571 Amortisation 116 231 133 1 143 Impairment
  • 00
233 254 300 EBIT 4 711 9 472
  • 3 546
  • 6 032
Net interest and fx (gain)/loss 560 1 022 117 594 Other finance cost
  • 00
  • 00
  • 7
  • 00
Net finance costs 560 1 022 109 594 EBT 4 151 8 450
  • 3 655
  • 6 627
Tax 838 1 627 315 1 285 Net income 3 313 6 823
  • 3 970
  • 7 912
Currency translation differences Total comprehensive income 3 313 6 823
  • 3 970
  • 7 912
Source: Magseis
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SLIDE 16

Second quarter and first half 2017

  • Balance sheet
  • Trade receivables comprising BGP/Aramco and
ConocoPhillips
  • May and June production (paid in Q3)
  • Other current assets:
  • Primarily capitalised mobilisation costs and stock
  • Equity ratio of 78.6%
  • Debt covenants at 30%
  • Non-current liabilities
  • Senior debt drawn down from Export Credit Norway and
Innovation Norway: USD 6.6m
  • Shell Deep Water R&D funding: USD 6.8m (contingent liability)
  • Current tax liabilities
– Withholding tax and corporate tax Saudi Arabia – Corporate tax in Singapore and Malaysia
  • Other current liabilities
– Current portion of long-term debt USD 3.2m – Accruals for vessel operational costs USD 3.1m In USD thousands YTD 2017 (unaudited) YTD 2016 (unaudited) 16 Equipment and other intangibles 59 930 55 199 Multi-client library Cash and cash equivalents 33 657 16 855 Trade receivables 21 404 5 769 Stock (fuel and batteries) 1 318 2 103 Other current assets 4 714 6 821 TOTAL ASSETS 121 023 86 748 Share capital 438 303 Share premium 141 506 102 486 Retained earnings and other reserves
  • 46 875
  • 45 226
TOTAL EQUITY 95 069 57 563 Obligation under finance lease 447 1 437 Other non-current financial liabilities 13 675 12 923 TOTAL NON-CURRENT LIABILITIES 14 122 14 360 Trade payables 4 045 10 007 Current tax liability 1 489 190 Other current liabilities 6 298 4 628 TOTAL CURRENT LIABILITIES 11 832 14 825 TOTAL LIABILITIES 25 955 29 186 TOTAL EQUITY AND LIABILITIES 121 023 86 748 Source: Magseis
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SLIDE 17

Second quarter and first half 2017

  • Cash flow
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  • Cash flow from operations
  • Increase in working capital resulting from:
  • Reversion to more normalised DSO from BGP on Red Sea survey
  • First month of production on ConocoPhillips survey
  • Catching up on WHT payments
  • Low level of Payables
  • Cash from investments
  • Relates mainly to investments for the ROV crew and crew 3
  • Cash flow from financing
  • Cash from subsequent equity raise of net USD 0.5m
  • Instalments of USD 2.5m (BGP pre-funding repaid)
  • Financing from Shell under Deepwater R&D agreement of USD 0.2m
Earnings before tax 4 151 8 450
  • 3 655
  • 6 627
Depr, Amor,Impair,Finance, etc. 2 044 6 222 2 071 6 329 Net working capital adjustments
  • 15 677
  • 14 080
  • 3 877
  • 3 630
Net cash flow from operating activities
  • 9 481
592
  • 5 461
  • 3 928
Net cash flow from investing activities
  • 8 827
  • 18 276
  • 8 399
  • 10 714
Net cash flow from financing activities
  • 2 228
32 367 15 497 20 062 Net change in cash and cash equivalents
  • 20 537
14 683 1 637 5 420 Cash balance at the beginning of the period 54 194 18 974 15 218 11 435 Cash balance at period end 33 657 33 657 16 856 16 855 In USD thousands Q2 2017 (unaudited) YTD 2017 (unaudited) Q2 2016 (unaudited) YTD 2016 (unaudited) Source: Magseis
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SLIDE 18

Summary: Magseis well positioned for 2018

18

Strong Operational Performance Strong Pipeline Flexible Operating Platform MASS Technology

  • Unrivalled flexibility and capacity in the 4D market
  • Source Isolation technology targeting 30-50% acquisition cost reduction
  • Succesfull introduction of MASS Modular with ROV deployment
  • Impressive operations in challenging conditions in the Red Sea
  • High probability for repeat business
  • Crew #3 targeting large surveys with increased efficiency
  • MASS Modular targeting 4D surveys and shallow water
  • Several active tenders in key markets (capacity already tied-up on awarded projects)
  • Strong focus on 4D and IOR
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SLIDE 19 19