M agseis ASA EAGE 2017 13 June 2017
AGENDA Introduction OBS market development Current M agseis operations Financials and outlook Appendix June 2017 2
This is M agseis • Leading provider of Ocean Bottom Seismic technology and services • M ainly production – IOR segment • Located in Oslo, Bergen, Stockholm, Singapore and Brazil • 100+ employees • Listed on Oslo Axess • M arket capitalisation of USD ~110m 3 June 2017
OBS provides superior image quality - Gaining share from streamer seismic Ocean Bottom Seismic (OBS) Streamer Seismic 80% 20% M arket share M arket share June 2017 4 Source: M agseis/ Statoil
Providing true “3-D” illumination of reservoirs OBS 3D streamer 3D streamer OBS Narrow Azimuth M ulti Azimuth Full Azimuth Wide Azimuth Streamer Data quality 1960s ~1990 2005-10 Today Exploration Field Development and IOR June 2017 5 Source: M agseis
Reduced cost will broaden application scope Increased cost competitiveness... ... will increase number of addressable fields M apping of currently producing fields or subprojects on producing fields PRICE PER KM 2 6 Historical OBS surveys Marlim Leste 5 No observed OBS survey Parque das Baleia Valhall Roncador Thunder Horse Nowruz Eldfisk Lobster Albacora Parque das Conchas Balder/Ringhorne/Jotun Grane 4 COM PLEXITY Andrew Marlin Golden Eagle Area Dan Edvard Grieg Development Champion OBS Shearwater Agbami-Ekoli Bonga Torpille Marine Jack/St Malo Arne South Beryl Nene Marine Bokor Buzzard Stones Heidrun Ceiba Ravva Alwyn North 3 Knarr Norne Valemon Kristin Clair Captain Visund Kvitebjorn Sepinggan BBLT Foinaven Bahar Daman Offshore Akpo Shah-Deniz Salsa 2 Dalia Cleeton Reduced costs and Sole West Snohvit maturity of technology High density/ WAZ 3D 1 3D 2D 0 1 10 100 1000 IM AGE QUALITY FIELD SIZE (mmboe) 6 June 2017 Source: M agseis/ Rystad Energy
Supporting a strong market outlook OBS market drivers IOR $ MILLION Focus 2 250 2 000 USD 1 575 >750 m Increasing 1 500 geological complexity 1 250 1 000 750 Technology 500 development 250 0 2005 2016 2017 2018 2019 2020 Customer confidence & adoption June 2017 7 Source: M agseis/ Arkwright/ Rystad Energy/ Statoil
M arine Autonomous Seismic System M iniaturised Handling system Applications node sensors Cable deployment ROV deployment Ultra deep water deployment June 2017 8 Source: M agseis
Larger spread driving substantial cost reductions 2018 2015 2014 2016 >600km 150km 75km 350km Cable length Large spreads - rolling operations M ultiple patch deployment 25K 100K $ per.km² $ per. km² June 2017 9 Source: M agseis
Aramco Red Sea project Operational highlights • Efficient transition from phase 1 of S-78 to Extension (rolling cables from one survey to the next) • Planned yard stay and delays caused by sandstorm meant that source acquisition could only commence on April 28 th • Very similar survey conditions with water depths varying form approximately 1,000m to transition zone and in some cases over dry land (islands) on the same receiver line. • Crew and nodes shows an excellent performance despite the challenging environment. • The robust M agseis “ node in a cable” solution proving it’s suitability on the rugged seabed. • Production in line with project plan June 2017 10 Source: M agseis
Aramco Red Sea project Scale: v/ h=1 11
ConocoPhillips North Sea project Contract highlights High capacity, mobile ROV operation • 4D, full-azimuth survey over M ASS modular solution the Eldfisk field • Unlimited capacity of nodes • ROV and source vessels operated by • M odular handling system ConocoPhillips • Very strong interest from clients • M agseis provides crew, • Smart operations nodes and handling • Potential for repeat work June 2017 12 Source: M agseis
Established as a leading OBS provider Proven track record Solid customer base Ongoing projects • Completed >1,300 sq.km 2 • Saudi Aramco’s S-78 Extension project in the Red • M ore than 140,000 Sea nodes deployed • Excellent reputation for • 4D survey ongoing for high quality data ConocoPhillips in North Sea • Strong QHSE culture June 2017 13 Source: M agseis
Crew #3 preparations ongoing • Vessel tender process in final stages of negotiation • Highly efficient platforms available at attractive terms • Significant component of vessel owner funding ensures that M agseis growth plan is fully financed • Commitments for up to 6,000 M ASS sensors and associated handling systems being prepared • Long-lead items are being ordered • Target start of operations by April 1 st , 2018 • Already bidding on projects June 2017 14 Source: M agseis
New, exclusive source technology agreement - Significant potential to reduce costs further • Improved efficiency and data quality by new Source Isolation technology • Improved source efficiency though simultaneous shooting by one source vessel • Improved shot sampling over conventional technologies • Exclusive agreement for OBS • Commercially available in 2018 Source Isolation Conventional shooting 25m 50m June 2017 15 Source: M agseis
Y FIGURES Q1 Q1 2017 KEY F 17 $ MILLION 21.1 REVENUE EBITDA 18.1 21.1 8.3 $ MILLION $ MILLION 8.3 NET INCOME CASH BALANCE 1.6 3.5 54.2 EBITDA REVENUE REVENUE EBITDA Q1 Q1 Q1 Q1 $ MILLION $ MILLION 2017 2017 2016 2016 June 2017 16 Source: M agseis
First quarter 2017 results - Key figures Solid underlying operational performance during • Profit and loss Q1 2017 Q1 2016 Year End 2016 Q1 (EBITDA of USD 8.3m) Revenue 21 076 18 115 58 905 Cost of sales 9 997 13 630 39 038 • USD 1.3m in capitalised mobilisation costs amortised in EBITDA 8 329 1 559 8 506 Cost of Sales EBIT 4 762 -2 487 -11 114 • USD 1.0m in late start compensation included in Net profit/ loss 3 511 -3 942 -16 695 Cost of Sales Basic earnings per share 0.06 -0.13 -0.44 • Cost of Sales for Q1 2016 included fuel and source vessel costs Financial position Cash 54 195 15 218 18 974 Working Capital 1) 6 173 537 4 812 Closing cash position of USD 54.2m • Total equity 91 134 49 826 49 045 and robust Equity ratio of 71.2% Equity ratio 71.2% 65.7% 56.6% Gross interest bearing debt 12 460 7 027 16 263 Cash flow Strong cash flow from operations during Q1 • • Cash flow from operations USD 10.1m Net cash from operating activities 10 074 1 533 -2 117 Net cash from investing activities -9 449 -2 316 -16 463 Reiterating full - year guidance Net cash from financing activities 34 596 4 565 26 120 • 1): Working Capital defined as Trade Receivables less Trade Payables • Expected EBITDA for 2017 of > USD 20 million June 2017 17 Source: M agseis
Attractive economics for new, high capacity vessel 2x higher efficiency through longer cable Substantial EBITDA contribution from new and more nodes investments Current crew Cable vessel #2 Current crew Cable vessel #2 ROV crew 70 45 Cable length 150km 400km >30 30 15 10 3,000 Sensors 8,000 130 # of days 65 EBITDA contribution 1 CAPEX 1.0 Efficiency 2.0 1) Based on 2017 EBITDA guidance for current crew less 2016 SG&A June 2017 18
Long term growth strategy Key goal Business model By 2020 • • • Reduce OBS acquisition Operate large equipment Node pool of >30,000 costs by >50% spreads nodes • • • Increasng the attractiveness Share pool of nodes across 2-3 high capacity cable of OBS by moving towards a platforms vessels • • cost of $25K/ km² Build a flexible opex base 2-3 modular ROV/ Node Deployer systems Developing M agseis into 25K the definitive market per. km² $ leader in OBS market June 2017 19
Summary and outlook • Strong financial performance, Revenue of USD 21.1m and EBITDA of USD 8.3m Strong operational and • First phase of S-78 Red Sea survey completed on time financial performance • Awarded Extension to S-78 project by BGP and Saudi Aramco Awarded extension In Red Sea • Expected duration of more than six months Pursuing substantial • Exclusive license agreement for Source Isolation technology applied to OBS shooting efficiency • Implementation of technology targeting 30-50% acquisition cost reduction improvements • Raised USD 40 million new equity to finance growth plans Growth projects • ConocoPhillips 4D ROV project ongoing well underway • Vessel tender process for Crew #3 in final stages and long-lead items on order June 2017 20
Excellent operational performance Strong financial results Larger spread driving cost reductions Strong market outlook 2 250 Cable length 2 000 2015 2016 2014 2018 1 575 350km 150km >600km 75km 1 500 1 250 1 000 750 500 250 0 $ 100K $ 25K per.km² per.km² 2005 2016 2017 2018 2019 2020 June 2017 21
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