magseis asa q3 2016 2 · magseis asa q3 2016 ... performance for saudi-aramco in the red sea ....
TRANSCRIPT
![Page 1: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/1.jpg)
Magseis ASA Q3 2016
11 November 2016
Large scale, efficient and cost effectiveSetting new standards within the seismic industry
Towards $ 25k/km2
![Page 2: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/2.jpg)
• Magseis well positioned to secure new contracts
• New contract wins neccessitate additional crew capacity and funding
Highlights third quarter 2016
• Client very pleased with data quality• Very good cooperation with BGP and Saudi Aramco• Production according to plan and excellent HSE performance
• Conversion to second generation seismic node electronics
• Write-down of old generation seismic nodes
• Full scale test of deep water deployment system
• Ongoing tenders with contract value close to USD 200M
• Market expected to double in size in 2017
Excellent operational performance for Saudi-Aramco in the Red Sea
Technology development towards $ 25 k/km2
Strong increase in tender activity
Further contract wins will trigger growth
2
![Page 3: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/3.jpg)
KEY FIGURES Q3 2016
Source: Magseis
13.1REVENUE
3.0EBITDA
-8.8NET INCOME
13.5CASH BALANCE
$ MILLION
$ MILLION $ MILLION
$ MILLION $ MILLION
13.1
38.9
3.0
REVENUE
Q3 2016
REVENUE
YTD2016
EBITDA
YTD2016
EBITDA
Q32016
3
3.0
![Page 4: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/4.jpg)
This is Magseis
OCEAN BOTTOM SEISMIC (OBS) PRODUCT DEVELOPMENT& MANUFACTURING
OSLO - BERGEN - STOCKHOLM SINGAPORE - BRAZIL
• Industry leading ocean bottom seismic company
• Start of operations Oct 2013
• One vessel in operations
• 81 employees
• Listed on Oslo Axess
Ticker
Shares outstanding
Market cap (NOKm)
Equity Ratio – Q3 16
MSEIS
37.818,014
459
56.1%
4
![Page 5: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/5.jpg)
Seismic acquisition
ONE core proprietary technology -> Multiple applications
Miniaturised node sensors Handling system
ROV deployment
5
Cable deployment
![Page 6: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/6.jpg)
67
• Technology well established
• Have completed >1000 sq.km. of high-endOBS acquisition
• More than 110 000 4-component sensor capsules deployed
• Building reputation for very high-quality data
• Established as the lowest-cost supplier in the industry
Source: Magseis operating close to FPSO at Captain Field
Now established as a leading OBS provider
Qualified (2013):
Qualified (2015/16):
Ongoing (2016):
![Page 7: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/7.jpg)
Aramco Red Sea project
8Source: Magseis. Operating together with BGP in the Red Sea
Operational highlights• Second survey in the Middle East
• Complex survey design
• Rolling spread across challenging seabed conditions
• Record amount of cable in operation (350km)
• Long-life node electronics introduced
• Excellent cooperation with BGP and Aramco
Strategically important reference for further work world wide
![Page 8: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/8.jpg)
Deepwater pilot test successfully completed
• Joint developent project with Shell to develop a technology to allow for highly efficient and accurate 4D acquistion in water depths > 1500 metres
• R&D work ongoing for > 2 years
• Successfull, full-scale pilot test completed during Q3 in > 1200 metres water depth
• Significant industry interest
• Target commercial operations by 2018
![Page 9: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/9.jpg)
Third quarter 2016 results - Comprehensive income
9
• Revenue• USD 13.1M from two months of production on Aramco’s S-78
project
• Cost of sales• Reflects 2 months (Aug/Sep) of full prodution• Costs for July capitalised as part of mobilisation (USD 3.7M)• Capitalised costs amortised based on expected duration of pilot
(USD 2.0M)
• Research and development• Capitalised all expenses related to the
Deep water R&D project (USD 1.9M) and development of MASS III
• Depreciation• Capitalised Depreciation from mobilisation amortised based on
expected duration of pilot survey (USD 0.6M)
• Amortisation and Impairment• USD 6.7M mainly related to conversion of G1 to G2 seismic node
technology
• Finance• Primarily interest accrued related to BGP pre-funding
• Tax• USD 1.4M relates to withholding tax Saudi Arabia
In USD thousands Q3 2016(unaudited)
YTD 2016(unaudited)
Q3 2015(unaudited)
YTD 2015(unaudited)
![Page 10: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/10.jpg)
Third quarter 2016 results- Balance sheet at 30 September
10
• Equipment and intangibles • Additions of USD 5.5M • Write down of USD 6.7M
• Trade receivables primarily Aramco• August and September production (paid in October)• Low level in Q3 15 reflects MC project that quarter
• Other current assets:• Primarily capitalised mobilisation costs
• Equity ratio of 56.1%• 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 4.7M (contingent liability)
• Other current liabilities– Short-term debt BGP USD 8.3M– Current portion of long-term debt USD 2.5 M– Accruals for vessel operational costs USD 5.4M
In USD thousands YTD 2016(unaudited)
YTD 2015(unaudited)
YE 2015(audited)
![Page 11: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/11.jpg)
Third quarter 2016 results - Cash flow
11
In USD thousands Q3 2016(unaudited)
YTD 2016(unaudited)
Q3 2015(unaudited)
YTD 2015(unaudited)
• Cash flow from operations• Variance from EBITDA resulting from:
• Increase in Working Capital from start of Red Sea survey• Capitalised/Amortised costs• WHT paid in Malaysia
• Cash from investments• Relates to remaining investments for the Saudi Aramco Red Sea
survey (USD 3.7M) and Deep water R&D project (USD 1.8M)
• Cash flow from financing • Draw-down of debt from Export Credit Norway and Innovation
Norway (USD 9.1M) • Financing from Shell under Deepwater R&D agreement (USD 0.4M)
![Page 12: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/12.jpg)
Current backlog and vessel schedule• Saudi Aramco’s S-78 together with BGP:
– Pilot running through April 2017– 12 months extension option
• Tender activity has increased significantly over past 6 months– North West Europe– South America– APAC
• Several strong leads for increased activity in 2017-2018
Source: Magseis
Firm
Lead
Yard/transit
11
Increased activity expected in all key regions
![Page 13: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/13.jpg)
Source: Magseis/Arkwright
OBS Market returning to growth
13Source: Magseis
OBS market growth 2005 – 2017E
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017e
109
180 190
318283
608577 602
613
823
750
790
390
4,4
5,86,2
7,4
6,15,7
6,6
8,08,3
7,3
4,4
3,3 3,3
4,2
0
2
4
6
8
10
12
14
0
200
400
600
800
100 0
120 0
Total Seismic market in BUSDOBS market (excluding low-end)
OBSMARKET
![Page 14: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/14.jpg)
Summary and outlook
14
•Production according to plan in the Red Sea
•Tender activity accellerating
•New contract awards will trigger capacity growth
•2016E EBITDA: USD 7-10M
![Page 15: Magseis ASA Q3 2016 2 · Magseis ASA Q3 2016 ... performance for Saudi-Aramco in the Red Sea . Technology development towards $ 25 ... Current backlog and vessel schedule](https://reader031.vdocuments.us/reader031/viewer/2022011802/5b21c7087f8b9a0c088b456f/html5/thumbnails/15.jpg)
Magseis ASA
Q & ATowards $ 25k/km2
Large scale, efficient and cost effectiveSetting new standards within the seismic industry