Seabird Exploration Group First Quarter 2010
(Thomson Reuters ONE) -
Highlights First Quarter 2010
· For the first time since Q4 2008, SeaBird is pleased to present an
EBITDA of USD 20.8 million resulting in a net consolidated profit after tax for
this quarter of USD 5.7 million.
· Hugin Explorer and Kondor Explorer continued the successful Ocean
Bottom Node ("OBN") operation in Nigeria for Chevron with higher utilization and
revenue than expected.
· OBN operation in Nigeria completed 20 April 2010 and both vessels
are mobilizing to the North Sea for an expected contract currently under
negotiation, in direct continuation from the previous survey.
· Several 2D/3D contracts awarded during Q1 2010, and the month of
April, giving contractual backlog including client options for most of the
vessels through Q3 and into Q4 2010.
key financial performance figures
For comparisons of income and expenses between 2010 and 2009, it must be noted
that changes in the operating performance of the OBN activity and the market
rates for 2D have affected the revenue for the SeaBird Group considerably.
The OBN operation with Hugin Explorer did not perform as expected on its first
survey during Q1 2009 and incurred significant losses. During Q1 2010, however,
the OBN operation with Hugin Explorer, and Kondor Explorer as source vessel, has
been very successful and generated revenues in excess of expectations,
contributing to more than half of the SeaBird Group's revenue.
The revenue levels for the 2D fleet were still quite high during Q1 and into Q2
2009 in particular for the two vessels working for ONGC in India. After reaching
their lowest levels in Q2-Q4 2009, revenue levels in 2010 for 2D are still
considerably below earlier levels from 2008 and beginning of 2009, but are
improving evidenced by contract rates that the company has achieved.
Consequently, and despite a satisfactory utilization of our 2D fleet,
contribution to the operating result from this part of SeaBird's activities was
low in Q1 2010.
Consolidated revenues for the SeaBird Group increased to USD 66.0 million in Q1
2010 from USD 41.1 million in Q4 2009, mainly due to the full utilization of the
Hugin Explorer and the Kondor Explorer, and the high quality performance shown
throughout the OBN survey for Chevron in Nigeria from December 2009 to April
2010. Also the 2D fleet has contributed more to the revenue this quarter than
the previous.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") were
positive at USD 20.8 million in Q1 2010 against a negative EBITDA of USD 0.7
million in Q4 2009. Operating expenses increased to USD 39.7 million in Q1 2010
from USD 36.3 million in Q4 2009, mainly due to higher cost of our OBN operation
in Nigeria than during the mobilization period October-November 2009 from Gulf
of Mexico.
Selling, general and administrative ("SG&A") expenses are unchanged at USD 5.9
million in Q1 2010 compared to Q4 2009.
Depreciation is slightly up from previous quarters at USD 11.6 million, mainly
due to depreciation of classification and dry-docking of 3 vessels and
investments in 250 more nodes, all capitalized in Q4 2009, and amortization of
USD 0.4 million for multi-client library.
Interest expense is continuing on the same level in Q1 2010 at USD 3.1 million,
as in Q3 and Q4 2009. Other financial income for the quarter of USD 2.2 million
refers to unrealized loss on exchange, mainly on the NOK 478 million bond loans
outstanding.
The income tax of USD 2.7 million in Q1 2010 refers mainly to withholding tax in
various jurisdictions around the world where the SeaBird vessels have been
operating. Increase from previous quarters refers mainly to the withholding tax
applicable for our OBN operation in Nigeria.
Q1 2010 net profit after tax was USD 5.7 million compared to a loss in Q4 2009
of USD 16.8 million and a loss in Q1 2009 of USD 15.3 million.
Capital expenditure was USD 0.7 million during Q1 2010, mainly referring to some
capital cost for vessel maintenance.
A weakening of USD against NOK and Euro has in general a negative impact on the
operating expenses, interest expenses and gross debt as SeaBird has significant
costs in other currencies than USD and bond loans of a total of NOK 478 million.
operational highlights Q1 2010
The vessel utilization for all seismic vessels operated by SeaBird for Q1 2010
was 76% compared to 80% in Q4 2009 and 55% in Q3 2009.
Following the increased number of awarded contracts to SeaBird in the 2D/3D
segment and mobilization of all vessels back to work during Q4 2009, utilization
of the 2 D/3D vessels in Q1 2010 was 74 %. While Harrier Explorer, Northern
Explorer, Hawk Explorer, Aquila Explorer and Osprey Explorer achieved
utilization between 72% and 100%, Munin Explorer and Geo Mariner (shallow water
3D) had utilization of 50% and 44% respectively, due to Munin Explorer being
idle from 18 February to 9 April 2010, and Geo Mariner from 15 February 2010.
Several new contracts were awarded to SeaBird during April 2010.
Aquila Explorer was awarded two additional surveys in South East Asia and one in
Australia with a combined total of approximately 4,500 km. This will result in
the Aquila Explorer being engaged continuously with the exception of 3-4 weeks
dry-docking, through to end October 2010.
Geo Mariner has been awarded a contract for a 3D survey of approximately 350
sqkm in Cameroon commencing end April after having been idle part of Q1 2010.
With the additional contract awarded to Northern Explorer in Indonesia lasting
through October, Aquila Explorer and Munin Explorer (including options) on
contracts through October, Munin Explorer and Hawk Explorer with good prospects
in sight after their firm period through May and finally Harrier Explorer on
long term to PGS to September 2011, SeaBird is fairly satisfied with the overall
contract backlog of the 2D fleet. Furthermore there are indications of an
increased demand for 2D seismic and Source services over the coming months.
Hugin Explorer, with Kondor Explorer as source vessel, commenced its Nigerian
OBN operation end of November 2009. The survey has progressed very
satisfactorily and the contract was completed on 20 April, about one month ahead
of schedule. Both vessels are presently under mobilization to the North Sea with
an ETA Aberdeen about 10 May. SeaBird is in the final stage of negotiating a new
contract, and believes this can be concluded in time for direct continuation of
the mobilization to the North Sea. Both Hugin Explorer deploying, retrieving and
maintaining the nodes and the accompanying source vessel Kondor Explorer have
performed continuously throughout Q1 2010 with minimum downtime and high
efficiency.
SeaBird is actively pursuing further employments for the OBN operation with
Hugin Explorer and Kondor Explorer from August/September 2010, following the
completion of the upcoming contract currently under negotiation. A dialog with
one of the major oil companies is due to commence shortly for a new OBN survey
in West Africa.
Liquidity and Financing
At 31 March 2010, cash and cash equivalents amounted to USD 15.2 million,
compared to USD 14.5 million at the end of 2009, and USD 17.6 million (thereof
USD 9.2 million restricted) at the end of Q1 2009.
Net cash flow from operating activities for Q1 2010 was USD 12.7 million,
against negative USD 12.8 million for Q4 2009, and positive USD 6.8 million for
Q1 2009. The increased net cash flow in Q1 2010 refers mainly to increased
revenues and adjustment in trade receivables and payables.
During Q1 2010 instalments of USD 7.5 million were paid to banks and USD 0.7
million on the lease of Hawk Explorer. Net interest-bearing debt decreased to
USD 156.1 million end of Q1 2010 from USD 168.2 million end of Q4 2009.
Due to the weak result in Q3 and Q4 2009 SeaBird was in breach of the loan
agreements, the Net Debt/EBITDA ratio covenant. Waivers have been received from
the banks.
There are no further significant committed investments, except normal
maintenance type expenditures and certain equipment upgrades for our present
fleet of vessels. However, the Management and the Board of Directors are
presently evaluating an expansion of the Ocean Bottom Node operation through
investing in a second OBN crew similar to the Hugin Explorer/Kondor Explorer
operation.
Outlook
The 2D market continues to recover, with a reasonable volume in tenders received
in Q1 2010, and supplemented by chartering out 2D vessels as source vessels to
service Wide Azimuth contracts for other seismic contractors. Far East remains a
good contract area for the Aquila Explorer and Northern Explorer, with constant
work now booked up to their respective dry-docking periods and thereafter
through to Q4 2010. For the vessels primarily working in the 2D sector SeaBird
is pleased to have received close to 40,000 line kilometers of work by early
April 2010. Some rates for these contracts are based on late 2009 submissions
and thus are reflecting lower revenues, but for the later contracts the income
is improving.
We continue to be optimistic for the 2D sector recovering in second half of
2010, and for rates to rise, although we do not expect in the short term to see
again the levels of 2008 and early 2009. Oil prices have increased even further
than was expected in our last report, and there is now great enthusiasm when
discussing E&P expenditures with the oil companies.
We are even more optimistic about the future OBN sector, where the increased
interest in this acquisition technique is opening further opportunities for the
future, in new surveys, repeat surveys, and potential longer term contract
employment. Due to the expected 30 days mobilization period for the Hugin
Explorer and Kondor Explorer to a new contract during Q2 2010, the EBITDA will
be reduced compared to Q1 2010.
As mentioned previously, we have been preparing the investment case for a second
OBN operation, and this will come to a final plan shortly.
The Board of Directors and Chief Executive Officer
SeaBird Exploration PLC
4 May 2010
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
[HUG#1411826]
Q1 2010 Report: http://hugin.info/136336/R/1411826/364131.pdf
Q1 2010 Presentation: http://hugin.info/136336/R/1411826/364132.pdf
Unternehmensinformation / Kurzprofil:
Datum: 05.05.2010 - 08:02 Uhr
Sprache: Deutsch
News-ID 20287
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