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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.


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.


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.


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. 



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 ยง5-12 vphl (Norwegian Securities Trading Act)