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 survey, three months duration, 3000 nodes, multi year option New contract won for ConocoPhillips • First Smart Operation, mobile handling system, no Magseis operated vessels • More than USD 600m of contracts already awarded for 2017 Marked increase • Several large projects announced/in pipeline for 2018 in tender activity • Need for new capacity to capture growth opportunities Accellerating growth plans • Appointment of financial advisors to evaluate financing options 2
S Q4 4 2016 KEY F FIGURES 016 58.9 $ MILLION REVENUE 20.0 EBITDA 5.5 20.0 8.5 $ MILLION $ MILLION 5.5 NET INCOME 0.1 CASH BALANCE 19.0 REVENUE EBITDA REVENUE EBITDA Q4 Q4 YTD YTD 2016 2016 2016 2016 $ MILLION $ MILLION 3 Source: Magseis
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
OBS provides superior image quality - gaining market share over high-end streamer seismic Streamer Seismic Ocean Bottom Seismic (OBS) 90%↓ 10%↑ Market share Market share 5
Marine Autonomous Seismic System Miniaturised Handling system Applications node sensors Cable deployment ROV deployment Ultra deep water deployment 6
Larger spread driving substantial cost reductions 2018 2015 2014 2016 >600km 150km 75km 350km Cable length Large spreads - 25K rolling operations Multiple patch deployment 100K $ per.km² $ per. km² 7 Source: Magseis
Established as a leading OBS provider Proven track record Solid customer base Ongoing projects • Completed >1,300 aq.km 2 • Saudi Aramco’s S-78 project • More than 130,000 in the Red Sea nodes deployed • • Excellent reputation for Preparing for 4D survey for high quality data ConocoPhillips in North Sea • Strong QHSE culture 8 Source: Magseis
Aramco Red Sea project 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 9 Source: Magseis
ConocoPhillips North Sea project MASS modular solution 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 10 Source: Magseis
Strong market outlook $ MILLION 2 250 2 000 USD 1 575 >600m 1 500 OBS 1 250 MARKET 1 000 750 500 250 0 2005 2016 2017 2018 2019 2020 11 Source: Magseis/Arkwright/RystadEnergy
Growth strategy - Towards $25K/km² No observed OBS survey Historical OBS surveys • Key Goals – Expand use of OBS through reducing costs > 50% • Business model: – Operate large equipment spreads COMPLEXITY – Share pool of nodes across platforms – Build a flexible OPEX base • By 2020: Reduced costs and – Node pool of >30,000 nodes maturity of technology – 2-3 high capacity cable vessels – 2-3 modular ROV/Node Deployer systems FIELD SIZE (mmboe) 12 Source: Magseis/Rystad Energy
Attractive economics for new, high-capacity vessel Efficiency Economics Current crew Cable vessel #2 Current crew Cable vessel #2 70 45 Cable length 150km 400km >30 30 Sensors 3,000 8,000 # of days 130 85 Efficiency 1.0 1.6 EBITDA contribution 1 CAPEX 1) Based on 2017 EBITDA guidance for current crew less 2016 SG&A 13 Source: Magseis
Summary & Outlook • Strong operational and financial performance • Second crew will start operations June 2017 • Tender activity accelerating • Engaged advisors to secure growth financing 14
Excellent operational performance Strong financial results Larger spread driving cost reductions Strong market outlook 2 250 Cable length 2 000 2015 2016 2018 2014 1 575 350km 75km 150km >600km 1 500 1 250 1 000 750 500 250 $ 100K $ 25K 0 per.km² per.km² 2016 2017 2018 2019 2020 2005 15
Revenue • Fourth quarter 2016 results • USD 20.0m from production on the Aramco S-78 project - Comprehensive income Cost of sales • • Reflects full production in the quarter Q4 2016 YTD 2016 Q4 2015 YTD 2015 In USD thousands (unaudited) (unaudited) (unaudited) (audited) • Capitalised costs amortised based on expected duration of 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 16
Fourth quarter 2016 results - Balance sheet at 31 December • Trade receivables primarily Aramco • December production (paid in 2017) YE 2016 YE 2015 In USD thousands (unaudited) (audited) • 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 17
Fourth quarter 2016 results - Cash flow • Cash flow from operations Q4 2016 YTD 2016 Q4 2015 YTD 2015 In USD thousands • Variance from EBITDA resulting from: (unaudited) (unaudited) (unaudited) (audited) • 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 18
Recommend
More recommend
