Magseis ASA Q4 2016 24 February 2017 Highlights Strong - - PowerPoint PPT Presentation

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Magseis ASA Q4 2016 24 February 2017 Highlights Strong - - PowerPoint PPT Presentation

Jan 10, 2023 508 likes •712 views

Magseis ASA Q4 2016 24 February 2017 Highlights Strong financial performance, Revenue of USD 20m and EBITDA of USD 5.5m Best quarter to date Very good technical performance in the Red Sea, completion mid -April 4D monitoring

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SLIDE 1

Magseis ASA Q4 2016

24 February 2017

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SLIDE 2

Highlights

  • Need for new capacity to capture growth opportunities
  • Appointment of financial advisors to evaluate financing options
  • Strong financial performance, Revenue of USD 20m and EBITDA of USD 5.5m
  • Very good technical performance in the Red Sea, completion mid -April
  • More than USD 600m of contracts already awarded for 2017
  • Several large projects announced/in pipeline for 2018

Best quarter to date New contract won for ConocoPhillips Marked increase in tender activity Accellerating growth plans

  • 4D monitoring survey, three months duration, 3000 nodes, multi year option
  • First Smart Operation, mobile handling system, no Magseis operated vessels
2
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SLIDE 3 KEY F FIGURES S Q4

4 2016

016 Source: Magseis

20.0

REVENUE

5.5

EBITDA

0.1

NET INCOME

19.0

CASH BALANCE

$ MILLION $ MILLION $ MILLION $ MILLION $ MILLION

20.0 58.9 5.5

REVENUE

Q4 2016

REVENUE

YTD 2016

EBITDA

YTD 2016

EBITDA

Q4 2016

8.5

3
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SLIDE 4

Fourth quarter 2016 results

  • Key figures
  • Solid underlying operational performance during
Q4 (adjusted EBITDA of USD 8.5m)
  • USD 1.2m in capitalised mobilisation costs amortised
  • USD 2.2m in late start compensation included in COGS
  • Net loss for FY 2016 significantly impacted by
  • Impairment of USD 7.4m (G1 to G2 conversion)
  • Late start compensation
  • Low rates on Bokor project + long mobilisation for Red Sea
  • Closing cash position of USD 19.0m
and robust Equity ratio
  • Net cash position of USD 2.7m
  • Strong cash flow from operations during Q4
  • Negative FY 2016 cash flow from operations reflects
extraordinary low receivables at YE 2015
  • Expected EBITDA for 2017 of > USD 20

million based on current run-rate

4 Source: Magseis
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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)

90%↓

Market share

10%↑

Market share

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SLIDE 6

Marine Autonomous Seismic System

Miniaturised node sensors Handling system Applications

ROV deployment Ultra deep water deployment Cable deployment

6
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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

Established as a leading OBS provider

Solid customer base Proven track record Ongoing projects

  • Completed >1,300 aq.km2
  • More than 130,000

nodes deployed

  • Excellent reputation for

high quality data

  • Strong QHSE culture
  • Saudi Aramco’s S-78 project

in the Red Sea

  • Preparing for 4D survey for

ConocoPhillips in North Sea

8 Source: Magseis
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SLIDE 9 Source: Magseis

Operational highlights

  • 9 months survey together with BGP for Saudi Aramco
  • Second survey in the Middle East
  • Complex survey design
  • Rolling spread across very challenging seabed conditions
  • Record amount of cable in operation (350 km)
  • Long-life node electronics introduced
  • Excellent cooperation with BGP and Aramco

Aramco Red Sea project

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SLIDE 10

ConocoPhillips North Sea project

Contract highlights

  • 4D, full-azimuth survey over Eldfisk field
  • ROV and source vessels operated by ConocoPhillips
  • Magseis provides crew, nodes and handling
  • Potential for repeat work

High capacity, mobile ROV operation

  • Unlimited capacity of nodes
  • Modular handling system
  • Very strong interest from clients
  • Smart operations
MASS modular solution 10 Source: Magseis
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SLIDE 11

Strong market outlook

OBS MARKET 2020 2019 2018 2017 2005 2016 2 250 2 000 1 575 1 500 1 250 1 000 750 500 250 Source: Magseis/Arkwright/RystadEnergy 11

USD >600m

$ MILLION
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SLIDE 12

Growth strategy

  • Towards $25K/km²
Historical OBS surveys No observed OBS survey Source: Magseis/Rystad Energy

COMPLEXITY

Reduced costs and maturity of technology
  • Key Goals
– Expand use of OBS through reducing costs > 50%
  • Business model:
– Operate large equipment spreads – Share pool of nodes across platforms – Build a flexible OPEX base
  • By 2020:
– Node pool of >30,000 nodes – 2-3 high capacity cable vessels – 2-3 modular ROV/Node Deployer systems 12

FIELD SIZE (mmboe)

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SLIDE 13

Attractive economics for new, high-capacity vessel

Efficiency Economics

150km 400km Sensors # of days Efficiency 3,000 130 1.0 8,000 85 1.6 Cable length Current crew Cable vessel #2 Current crew

CAPEX EBITDA contribution1 13

Cable vessel #2

Source: Magseis

70 30 45 >30

1) Based on 2017 EBITDA guidance for current crew less 2016 SG&A
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SLIDE 14

Summary & Outlook

  • Strong operational and financial performance
  • Second crew will start operations June 2017
  • Tender activity accelerating
  • Engaged advisors to secure growth financing
14
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SLIDE 15 2020 2019 2018 2017 2005 2016 2 250 2 000 1 575 1 500 1 250 1 000 750 500 250

Larger spread driving cost reductions Excellent operational performance Strong financial results Strong market outlook

100K $

per.km² per.km² 2014 75km 2015 150km 2016 350km 2018 >600km Cable length

25K $

15
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SLIDE 16

Fourth quarter 2016 results

  • Comprehensive income
  • Revenue
  • USD 20.0m from production on the Aramco S-78 project
  • Cost of sales
  • Reflects full production in the quarter
  • Capitalised costs amortised based on expected duration
  • f pilot of USD 1.2m
  • Late start compensation of USD 2.2m
  • Research and development
  • Capitalised all expenses related to the Deep water
R&D project (USD 0.2m) and development of MASS III
  • Depreciation
  • Capitalised Depreciation from mobilisation amortised based on
expected duration of pilot survey (USD 0.4m)
  • Amortisation and Impairment
  • USD 0.4m mainly related to improvement needed on
nodes damaged during Red Sea survey
  • Finance
  • Primarily interest related to BGP pre -funding, GIEK and
Innovation Norway
  • Tax
  • Relates to withholding tax and corporate in Saudi Arabia and
corporate tax in Singapore and Malaysia In USD thousands Q4 2016 (unaudited) YTD 2016 (unaudited) Q4 2015 (unaudited) YTD 2015 (audited) 16
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SLIDE 17

Fourth quarter 2016 results

  • Balance sheet at 31 December
  • Trade receivables primarily Aramco
  • December production (paid in 2017)
  • Other current assets:
  • Primarily capitalised mobilisation costs
  • Equity ratio of 56.6%
  • Debt covenants at 30%
  • Non-current liabilities
  • Senior debt drawn down from Export Credit Norway and
Innovation Norway
  • Shell Deep Water R&D funding: USD 6.2m (contingent liability)
  • Current tax liabilities
– Withholding tax and corporate tax Saudi Arabia – Corporate tax in Singapore and Malaysia
  • Other current liabilities
– Short-term debt BGP USD 5.2m – Current portion of long-term debt USD 2.6m – Accruals for vessel operational costs USD 5.4m In USD thousands YE 2016 (unaudited) YE 2015 (audited) 17
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SLIDE 18

Fourth quarter 2016 results

  • Cash flow
In USD thousands Q4 2016 (unaudited) YTD 2016 (unaudited) Q4 2015 (unaudited) YTD 2015 (audited) 18
  • Cash flow from operations
  • Variance from EBITDA resulting from:
  • Favourable payment terms on receipts in Q4’16
  • (less) 10% withheld & accrued compensations
  • Non-cash costs in OPEX (amortised transit costs & provisions)
  • (less) reduced AP creditor position
  • Cash from investments
  • Relates to investments for the Node Deepwater project
  • Cash flow from financing
  • Instalments of USD 3.8m
  • Financing from Shell under Deepwater R&D agreement of USD 1.5m