SeaBird Exploration Plc - Third Quarter 2010
(Thomson Reuters ONE) -
Highlights third quarter 2010
· SeaBird is pleased to announce a Q3 report with an EBITDA of USD
7.9 million.
· The OBN operation with Hugin Explorer and Kondor Explorer was
successfully completed for Chevron North Sea Limited west of Shetland well
within schedule 12 August 2010. A new survey for Shell Nigeria Exploration &
Production Company Limited started 15 September 2010.
· SeaBird issued a NOK 120 million convertible, non-transferable loan
in favour of Perestroika AS with three years maturity. The loan may be converted
to shares in SeaBird, up to 23 August 2013 at NOK 3.35 per share. The loan
carries an interest rate of 1%. The loan is unsecured, and is provided for
general corporate purposes.
· SeaBird concluded a restructuring in September of its bank debt of
USD 46.9 million to a bank consortium with BN Bank as agent a new repayment
profile of five years, with a balloon after two years (September 2012) and the
first quarterly instalment in December 2010. The loan carries an interest rate
of three months US Libor plus a margin of 4%.
key financial performance figures
For comparisons of income and expenses for the first 9 months of 2010 and 2009,
it must be noted that changes in the operating performance of the OBN activity
and the market rates for 2D have significantly affected the revenues for
SeaBird.
The OBN operations with Hugin Explorer incurred significant losses on its first
survey during Q1 and partly into Q2 2009, while the OBN operation with Hugin
Explorer and Kondor Explorer as source vessel has been very successful in 2010
and generated revenues in excess of expectations in Q1 and partly in Q2, while
Q3 has been less favourable, but the OBN operation is still contributing to more
than half of SeaBird revenues this year.
The revenue levels and utilization for the 2D fleet were still quite high during
Q1 and partly into Q2 2009 in particular for the two vessels working for ONGC in
India. After reaching their lowest levels in Q3 2009, utilization improved in
the first half of 2010, but has fallen during Q3 2010. Consequently, the revenue
level is down in 2010 compared to 2009.
Consolidated revenues for SeaBird decreased to USD 43.2 million in Q3 2010 from
USD 50.2 million in Q2 2010, mainly due to lower rate levels on the OBN
operation for the Chevron Rosebank contract west of Shetlands compared to the
Chevron Agbami contract in Nigeria, and one month mobilization of the vessels
back to Nigeria, which is compensated less than during operations. Also the 2D
fleet has contributed slightly less to the revenues this quarter than the
previous quarter due to two idle vessels part of the quarter. Revenues include
Multiclient sales of USD 2 million in Q3 2010, the same as in Q2 2010.
Operating expenses including bareboat charter hire increased to USD 30.1 million
from USD 28.5 million in Q2 2010. OBN operating cost is up due to moving back to
Nigeria where operating cost is higher than in the North Sea and the use of
Munin Explorer as source with a higher bareboat charter cost than the Kondor
Explorer. 2D operating cost is however down due to reduced cost for Hawk
Explorer and Kondor Explorer in idle/lay-up mode. SeaBird has also performed
about 3.5 vessel-months of Multiclient work during Q3 2010, and capitalized USD
3.9 million of operating costs related to this work in line with industry
practice.
Selling, general and administrative ("SG&A") expenses are slightly down in Q3
2010 at 5.9 million compared to USD 6.1 million in Q2 2010.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") were
USD 7.9 million in Q3 2010 compared to USD 15.7 in Q2 2010. Reduced EBITDA in Q3
2010 compared to Q2 2010 refers mainly to reduced revenues explained above.
Depreciation is down at USD 13.7 million in Q3 2010 from USD 14.9 million in the
previous quarter, mainly due to reduced amortization of Multiclient library.
Interest expense at USD 2.9 million in Q3 2010 is on the same level as previous
quarters.
Other financial cost of USD 8.0 million for the quarter refers mainly to
unrealized loss on exchange of USD 7.9 million on the NOK 478 million bond loans
and the NOK 120 million convertible loan outstanding.
The income tax of USD 3.3 million in Q3 2010 refers to withholding tax in
various jurisdictions where the SeaBird vessels have been operating. This is
higher than previous quarters, mainly due to high tax levels for one vessel in
Mozambique completed end August.
Net loss after tax in Q3 2010 was USD 19.9 million compared to a net profit of
USD 1.5 in Q2 2010, while Q3 2009 had a loss of USD 24.7 million. Net loss for
the nine first months of 2010 is USD 12.7 million.
Capital expenditure was USD 4.6 million during Q3 2010, of which USD 2.8 million
related to dry docking and classification of Aquila Explorer completed early
September. Capex for the first 9 months 2010 amounts to USD 8.1 million.
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 Q3 2010
The vessel utilization for the 9 seismic vessels operated by SeaBird for Q3
2010 was 66%, down from 76% in Q1 and Q2 2010.
The Ocean Bottom Node operations with the Hugin Explorer deploying, retrieving
and maintaining the nodes and the accompanying source vessel have continued to
perform well throughout Q3 2010 with minimum downtime at a combined utilization
of 99%. The OBN contract for Chevron on the Rosebank field west of Shetland was
successfully completed ahead of schedule on 12 August with 761 out of 762 nodes
delivering high quality data. Kondor Explorer was used as source vessel up to
12 August when it was replaced by Munin Explorer. A new OBN survey commenced on
15 September for Shell Nigeria Exploration & Production Company Limited in
Nigeria, and operations have so far been running as planned with no significant
disruptions, and is expected to be completed by second half of November 2010.
SeaBird is presently pursuing further OBN employments and there are
opportunities that may materialize into continued employment in line with the
OBNs performance since its inception in Q4 2008. Contracts have not yet been
executed for these opportunities.
Utilization of the 2D/3D and Source vessels in Q3 2010 was 62%, down from 71% in
Q2 2010. The main reason for the reduced utilization is that Kondor Explorer was
laid up in a cold stacked mode from 12 August, Hawk Explorer has been idle but
maintained in a standby mode with significantly reduced crew and cost since mid
July, and Aquila Explorer was almost 5 weeks off-hire for dry docking and
classification.
The rest of the fleet has performed well with Harrier Explorer on 97%
utilization, Northern Explorer 81%, Osprey Explorer 76%, Geo Mariner 71%
(shallow water 3D), and Munin Explorer on 71%, including the time she was source
vessel for the OBN operation.
For the 2D/3D and Source fleet, the backlog has not developed as positively as
expected partly due to the aftermath of the Macondo incident in GOM. While
Harrier Explorer is continuing on a long term contract to PGS through August
2011, the Geo Mariner is on contract to beginning of January 2011, the Aquila
Explorer to mid December 2010 and Northern Explorer to 2(nd) half of November
2010. The Osprey Explorer incurred an unexpected idle period from late September
due to a postponement of a 2D contract offshore Madagascar. The vessel will be
maintained in a standby, but off hire mode, with reduced cost, while other
potential work is being pursued.
LIQUIDITY AND FINANCING
At 30 September 2010, cash and cash equivalents amounted to USD 26.3 million,
compared to USD 5.6 million at the end of Q2 2010, and USD 7.6 million at the
end of Q3 2009. Increased cash refers to the NOK 120 million convertible loan
placed mid September 2010.
In September 2010 SeaBird concluded a renegotiation of its bank debt to a
consortium of banks with BN Bank as agent to restructure the present bank debt
of USD 46.9 million as of 30 June 2010 to a repayment profile of five years,
with a balloon after two years (September 2012). The first quarterly instalment
is in December 2010. The securities in three 2D seismic vessels are maintained,
but with an added security in the Nodes and Equipment in use on the OBN vessel,
the Hugin Explorer. The loan carries an interest rate of three months US Libor
plus a margin of 4% per annum.
SeaBird issued a NOK 120 million convertible, non-transferable loan in favour of
Perestroika AS, as lender, with three years maturity in September 2010. The Loan
may be converted into 35,820,895 shares in SeaBird, at any time up to 23(rd)
August 2013 at a price of NOK 3.35 per share. The loan carries 1% interest per
annum. The interest may also be converted into shares in the company. The loan
is unsecured and provided for general corporate purposes.
Net cash flow from operating activities for Q3 2010 was negative at USD 0.4
million against positive at USD 4.2 million for Q2 2010.
Instalments of USD 1.25 million were paid to banks and USD 0.7 million on the
lease of Hawk Explorer during Q3 2010.
Net interest-bearing debt (includes cash and currency adjusted debt) increased
to USD 159.9 million end of Q3 2010 from USD 154.9 million end of Q2 2010.
However about USD 7.9 million refers to adjustment in Q3 2010 for unrealized
loss on exchange on the NOK based bond debt and convertible loan.
SeaBird is in compliance with all covenants under the bonds and bank loans
agreements.
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
evaluating an expansion of the Ocean Bottom Node operation through investing in
a second OBN crew.
OUTLOOK
Oil prices have remained high even through the latest financial unrest, and
stabilized at a level between USD 80-85 over the last few weeks.
Major oil companies and seismic companies presented very positive studies at the
SEG conference in Denver in October about the advantages in using the Ocean
Bottom Nodes to provide 4D/4C seismic on fields in production in deep water with
congested surface and seabed area. Consequently the demand for SeaBird's OBN
services is expected to increase significantly in Q1 and Q2 next year with
limited capacity available in the market.
The 2D tendering activity has dropped to a low, but still steady, level compared
to previous quarters, and SeaBird is vigorously pursuing relevant opportunities.
As a result of the firm oil price and lower reserves, incentives are high with
all oil companies to increase their exploration budgets and consequently the
seismic activities in their 2011 budgets.
Due to the short term market outlook for Q4 2010 and onwards with one source
vessel cold stacked and two 2D vessels presently idle, the Board of Directors
are closely watching the tendering activity in this segment over the next few
months for a potential write down of part of the 2D/Source fleet at year end.
Based on expected employment for the OBN operation with Hugin Explorer and Munin
Explorer in continuation after the present Shell contract in Nigeria, and a
continued soft 2D market, SeaBird is expecting a revenue and EBITDA level for Q4
in line with Q3 2010.
The Board of Directors and Chief Executive Officer
SeaBird Exploration PLC
2(nd) November 2010
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
[HUG#1458333]
Q3 2010 Presentation:
http://hugin.info/136336/R/1458333/397824.pdf
Q3 2010 Report:
http://hugin.info/136336/R/1458333/397822.pdf
This announcement is distributed by Thomson Reuters on behalf of
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: SeaBird Exploration Ltd. via Thomson Reuters ONE
Unternehmensinformation / Kurzprofil:
Datum: 03.11.2010 - 07:31 Uhr
Sprache: Deutsch
News-ID 48338
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