Pareto Oil & Offshore Conference Oslo, 14 th September Henning Olset, CFO

Transcription

1 Pareto Oil & Offshore Conference Oslo, 14 th September 2016 Henning Olset, CFO

2 CAUTIONARY STATEMENT This presentation contains both statements of historical fact and forward looking information. Any forward looking information is based on management assumptions and analysis and are subject to risks and uncertainties that are difficult to predict as they relate to events and/or circumstances in the future. Actual results and events may differ materially from those expected or projected in the forward looking statements. Spectrum undertakes no responsibility or obligation to update or alter forward looking statements.

3 Spectrum in a nutshell Spectrum is a pure-play Multi-Client Seismic provider to the O&G Industry Spectrum is asset light and vessels are chartered on a project-by-project basis Spectrum holds the largest marine 2D Multi-Client library in the industry Spectrum builds 3D library in selected areas Spectrum has 200 employees (Included JV in Egypt), with a majority of geoscientists Market Cap ~ NOK 1.4 billion Yellow areas indicate Spectrum seismic data coverage Offices: Oslo London Cairo Houston Rio de Janeiro Perth Singapore Jakarta

4 Principles of Multi-Client business Invest in seismic projects at «the right place at the right time» Exploration driven seismic projects (open area): New Discoveries Upcoming Licensing Rounds New Acreage opening up Asset light companies Client controlled seismic projects (held acreage): Proprietary surveys converted to Multi-Client Groupshoots 4D seismic Asset heavy companies

5 Building a Multi-Client company The asset light MC model is superior in almost any point in the cycle Instantaneous adaption to market conditions Focus on sale and cash to manage the cycle Partnering options for de-risking and technology access Size, volume and geographical spread is critical for Multi Client library Organic growth alone is not sufficient to reach critical mass Down cycles offer opportunities to acquire distressed libraries below book value (ref Fugro and Polarcus MC libraries)

6 MUSD Payback profile of 2011 library acquisition Payback profile - acquisition of CGG MC2D library in 2011 Comments Spectrum recouped its investment in the acquired CGG library in less than 12 months 0.3x x x 1.1x 0.9x ,3x 53 2,1x 1.9x 1,8x 1,6x 1,7x 1.4x 84 1,4x 1,3x ,5x 2,0x 1,5x 1,0x 0,5x The graph illustrates the investment and accumulated revenues for the acquired library from CGG (figures as of 4Q 2014) As of 4Q14 Spectrum had realized accumulated sales of USD 84 million from the acquired library (2.1x investment) 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 0,0x Accum. sales-to-investment Accumulated sales Investment -0,5x -1,0x Strong cash flow facilitated Spectrum s organic growth

7 USDm Spectrum organic projects % % %209.1 % %197.0 %198.8 %198.8 % % % % 59.4 % % % % % % % % 50.0 % 50 0 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q % Acc. net revenue Acc. Investments Cost coverage

8 Acquisition of Fugro s global multi-client library in June 2015

9 Investment rationale 1 Strategic companychanger Market leader in MC2D Significant position in MC3D Strengthen positioning in key offshore O&G basins 2 Attractive economics 2x sales/investments ratio achievable Limited incremental OPEX 3 Risk diversification Lower dependence on specific areas Increased customer base

10 Strengthened position in key offshore basins Size of MC2D library Ex-Fugro MC2D library (Thousand km) ~ Other 80 Brazil Size of MC3D library Ex-Fugro MC3D library (Thousand km2) ~140 Other Brazil Netherlands USA Norway Brazil Mozambique Key offshore O&G basins Discovered offshore resources last ten years top 8 countries (Billion BOE) Australia USA Norway Australia USA Norway Fugro s library: Coverage Australia Australia Russia Limited coverage 20 Israel Total 0 Total Saudi Arabia Note: Km / km2 includes reprocessed and co-owned data Source: Fugro, Rystad

11 Q2 update

12 Q Highlights Q2-16 Q2-15 Change Net Revenue MUSD 14 MUSD 35-61% EBITDA MUSD 8 MUSD 26-69% EBIT MUSD (10) MUSD 9-214% Q MC investments of MUSD7, down from MUSD120 in Q (MUSD11 in organic MC investments) Amortization rate of 127% in the quarter Net cash of MUSD15 end of quarter (MUSD37 end Q1) Debt reduced by MUSD24 in the quarter

13 Q Highlights Challenging market persists in 2nd quarter, but interest in certain areas picking up 2 acquisition projects ongoing in Q2 with industry funding Reduced OPEX by 20% on a normalized basis

14 Multi-Client NBV & Investments Q MC investments MUSD 7 (Prefunding of 73%) Amortization Q % (Q2 2015: 47%) MUSD FY FY 2013 FY Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q Investment Closing NBV

15 Operations

16 Operations Summary Two active surveys during Q2 Somalia MC2D Amazonas JV MC2D Reprocessing 144,000 km of MC2D data 21,300 sqkm of MC3D data

17 Areas of High Interest Relevant Licensing Activities Australia round open, 4-6 month close Norway - APA rounds, 24 th round UK - 29 th round expected 2016 Mexico - Round One ongoing Somalia - 1 st round expected 2017 SW Africa - open door Brazil - round expected 2017 Key Exploration Wells 2016

18 MC2D projects completed in Q2 Somalia MC2D 21,000 km of new long-offset data acquired, survey completed in April 2016 Final products available in Q4 2016, ahead of anticipated license round in 2017 Supported by industry Includes brokerage of existing 20,000 km data (2014 vintage). Total coverage of 41,000 km

19 MC2D projects completed in Q2 Amazonas Phase-3 MC2D Program of 10,400 km, in partnership with BGP Survey completed in June, data available in Q4 ahead of anticipated license round in 2017 Infills coverage from Amazonas to Barreirinhas Merges with 125,000 kilometers of Spectrum data on the very active Atlantic Margin

20 Ongoing MC2D projects Santos Campos Phase 2 Program of 15,000 km, in partnership with BGP Survey started in July and completes in Q4, data available in Q Expanding coverage over prospective pre-salt basins for an anticipated round in 2017 Supported by industry

21 Ongoing MC3D projects Olympus MC3D reprocessing 21,300 sqkm broadband reprocessing project High-grading existing Spectrum 3D data (purple) Coverage extended by reprocessing open file data (blue) in cooperation with Searcher Seismic. Final products available in Q Supported by industry

22 Summary Spectrum has grown into the world s largest MC2D player The asset light MC model is instantly adaptable to changing oil price trends Focus on sales from MC library New projects Initiation will depend on managing uncovered risk (pre-funding levels, partnering)

23 Q & A