Magseis ASA: Third Quarter 2014 26 November 2014
Disclaimer This Presentation of Magseis ASA (the “Company”) has been prepared solely for information purposes. This Presentation may not be distributed, reproduced or used without the consent of the Company. The information contained herein does not purport to contain all information concerning the Company. No party has made any kind of independent verification of any of the information set forth herein, including any statements with respect to projections or prospects of the business or the assumptions on which such statements are based. The Company nor any of its subsidiaries make any representations or warranty, express or implied, as to the accuracy, reliability or completeness of this Presentation or of the information contained herein and shall have no liability for the information contained in, or any omissions from, this Presentation. Included in this Presentation are various “forward - looking statements”, including statements regarding the intent, opinion, beli ef or current expectations of the Company or its management. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance and outcomes to be materially different from any future results, performance or outcomes expressed or implied by such forward-looking statements, including, among others, risks or uncertainties associated with the Company’s business, segments, development, growth management, financing, market acceptance and relations with customers, and, more generally, general economic and business conditions, changes in domestic and foreign laws and regulations, taxes, changes in competition and pricing environments, fluctuations in currency exchange rates and interest rates and other factors, including lack of operating history. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this document. No information contained herein constitutes, or shall be relied upon as constituting, any advice relating to the future performance of the Company. The Company undertakes no obligation to publicly update or revise any forward-looking statements included in this Presentation. Source: Magseis 2
Content 1. Highlights 2. Operational and Market update 3. Financials 4. Summary and Q&A 3
This is Magseis • Industry leading ocean bottom Ticker: MSEIS seismic (OBS) company Shares outstanding: 27,162,561 • Start of operations Oct 2013 Market cap (NOKm) 670 • One vessel in operations • Book Equity – Q3 14 66.2 75 employees (USDm) • ~NOK 500m in equity raised (21.9) 1 Net Debt – Q3 14 (USDm) • Listed on Oslo Axess Note: 1) Excludes Financial Lease for winch package 4 Source: Magseis
Highlights from the Third Quarter Operational highlights: Financial performance to date • Completed Gullfaks and Oseberg surveys USD mill. 44,8 • Started operations on South Arne for Hess • 4,500 sensor upgrade ongoing Financial highlights: • Revenue – USD 14.6 million – Impacted by yard stay and production speed 16,4 14,6 13,9 • EBITDA – USD 1.5 million 6,3 2,8 2,0 1,5 • Net income – USD - 2.0 million Rev. EBITDA Rev. EBITDA Rev. EBITDA Rev. EBITDA – Negatively impacted by impairment and NOK/USD Q1 14 Q2 14 Q3 14 YTD 14 conversion Source: Magseis 5
Content 1. Highlights 2. Operational and Market update 3. Financials 4. Summary and Q&A 6
A very successful first year of operations completed • Surveys successfully completed for Statoil and Talisman, now Surveys completed to date working for Hess Denmark – Albatross/Snøhvit – Varg – Oseberg – Gullfaks – South Arne • Very good data quality • Unparalleled deployment accuracy • Established ability to work near complicated infrastructure • Work performed in extreme conditions, thus expanding the traditional OBS weather window Source: Magseis and Talisman Energy (photo) 7
Q3 performance • Magseis continuing to establish MASS as the leading system for 4D work on producing fields (with lot of infrastructure and simultaneous operations) • Very strong HSE performance • However, Q3 Production negatively impacted by: – Unplanned yard stay – Lower than expected production due to field activity and technical issues Source: Hess, Magseis 8
Relative cost position • Significant improvements in efficiency USD/km2 since start-up 3,0x – Increased deploy/recovery speeds – Increased shooting speed 2,5x – Reduced technical downtime 50% improvement 2,0x to date • Current efficiency (on Hess) fully on par 1,5x with most relevant competitors Larger equipment count will increase efficiency further 1,0x • Further improvements now coming – New INEX machine 0,5x – Greater sensor unit/cable inventory -- Albatross Varg Oseberg/Gullfaks INEX machine More Equip. • Post-upgrade the Athene crew will be very cost effective relative to competition 9 Source: Magseis
Backlog and market outlook • Current Hess survey expected to run through mid-December • Currently bidding on several projects for 1H 2015 both with short and mid- term start up • Several large projects scheduled for start in 2H 2015 • Magseis establishing agent/sales networks in all key regions • Based on projected demand for 2H 15 – 1H 16 capacity may be tight Source: Magseis 10
Planned Athene upgrade Artemis Athene • New back-deck handling system (INEX) will be installed after Hess survey • Remaining upgrade being planned for February 2015 (will be coordinated with vessel schedule) – Additional sensor units (1,500) – Additional cable (75km) – Additional handling equipment • Will be combined with 5yr classing of Athene – Estimated at approx. 14 days – No T/C payable during the period • Will start work to facilitate further expansion of Athene Source: Magseis 11
Content 1. Highlights 2. Operational and Market update 3. Financials 4. Summary and Q&A 12
Q3 2014 results - Comprehensive income All figures in USD thousands Q3 14 Q3 13 YTD 14 YTD 13 • Revenue Revenue 14,579 0 44,846 0 – Revenue below expectations due to yard Cost of sales 9,699 0 29,248 0 stay and lower than expected production Research and development 416 570 996 791 • Cost of sales SG&A and other expenses 2,990 2,938 8,263 5,319 – Includes an accrual for repair of node EBITDA 1,474 -3,508 6,339 -6,110 houses (USD 0.3m) Depreciation and amortisation 1,845 47 5,571 137 • R&D Impairment 798 0 1,036 0 – Capitalised USD 0.4m in Q3 2014 and a total EBIT -1,169 -3,555 -268 -6,247 of USD 0.8m YTD 2014. Net interest and foreign currency (gain)/loss 793 -71 615 -374 • SG&A Other finance cost 0 0 549 0 – Net finance costs 793 -71 1,164 -374 Includes share options cost of USD 0.2m in Q3 2014 and USD 0.8m in YTD 2014 EBT -1,962 -3,484 -1,432 -5,873 • Impairment Tax 0 0 0 0 Net income -1,962 -3,484 -1,432 -5,873 – USD 0.5m relates to nodes damaged during shake down period Currency translation differences 0 176 -1,155 -4,083 – Total comprehensive income -1,962 -3,308 -2,587 -9,956 USD 0.3m related to parts of back-deck handling system being replaced Earnings per share -0.07 -0.17 -0.06 -0.28 • FX loss Q3 2014 Diluted earnings per share -0.07 -0.17 -0.06 -0.28 – Mainly relates to conversion of functional currency from NOK to USD 13
Q3 2014 results - Balance sheet All figures in USD thousands YTD 14 YTD 13 2013 Equipment and intangibles 41,516 38,552 39,548 • Other current assets Cash and cash equivalents 21,901 11,525 6,867 Other current assets 16,803 1,433 12,277 – Includes USD 7.6m in receivable from TOTAL ASSETS 80,220 51,510 58,692 Statoil for acquisition in August and September Share capital 237 186 186 – USD 5.1m in accrued revenue and Share premium 83,755 60,026 60,026 prepayments to suppliers Other reserves 1,833 749 1,044 Retained earnings -14,510 -10,287 -13,078 • Equity Currency translation reserve -5,123 -3,392 -3,968 – Currency translation reserve reflects TOTAL EQUITY 66,192 47,282 44,210 differences arising from using different rates when translated historical P/L, Obligation under finance lease 2,939 0 3,501 assets and liabilities and equity. TC amortisation 1,499 0 1,867 TOTAL NON-CURRENT ASSETS 4,438 0 5,368 Trade payables 2,266 109 4,335 Current portion of obligation under finance lease 742 0 685 Other current liabilities 6,582 4,119 4,094 TOTAL CURRENT LIABILITIES 9,590 4,228 9,114 TOTAL LIABILITIES 14,028 4,228 14,482 TOTAL EQUITY AND LIABILITIES 80,220 51,510 58,692 14
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