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SeaBird is pleased to announce a Q2 report with an EBITDA of USD 15.7 million. 

The very successful OBN operation with Hugin Explorer and Kondor Explorer for Chevron in Nigeria was completed 20 April 2010. Both vessels then mobilized to the North Sea for an OBN survey for Chevron on the Rosebank field west of Shetland that was completed well within schedule on 7 August 2010.

A new OBN contract has been awarded to SeaBird with Shell on a field in Nigeria which will commence in direct continuation from the Chevron Rosebank survey at around mid September following mobilization.

key financial performance figures


For comparisons of income and expenses for the first 6 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 and generated revenues in excess of expectations in Q1 and Q2 2010, contributing to more than half of the SeaBird Group's revenues.


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 has improved in 2010, but revenue levels are still considerably below levels from 2008 and beginning of 2009. 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 and Q2 2010.


Consolidated revenues for the SeaBird Group decreased to USD 50.2 million in Q2 2010 from USD 66.0 million in Q1 2010, mainly due to reduced rate levels on the OBN operation for the Chevron Rosebank contract west of Shetlands compared to the Chevron Agbami contract in Nigeria. There is also one month of mobilization for Hugin Explorer and Kondor Explorer between the two contracts (20 April-23 May) which is compensated less than during operations. Also the 2D fleet has contributed less to the revenues this quarter than the previous quarter. Revenues include Multiclient sales of USD 2 million in Q2.


Operating expenses decreased to USD 28.5 million in Q2 2010 from USD 39.7 million in Q1 2010, mainly due to reduced cost of our OBN operation in the North Sea compared to operations in Nigeria. SeaBird has also performed about four vessel-months of Multiclient work during Q2 2010, and capitalized USD 4.6 million of operating costs related to this work in line with industry accounting standards.


Selling, general and administrative ("SG&A") expenses are slightly up in Q2 at 6.1 million compared to USD 5.9 million in Q1 2010.


Earnings before interest, taxes, depreciation and amortization ("EBITDA") were USD 15.7 million in Q2 2010 compared to USD 20.8 million in Q1 2010.


Depreciation is up from previous quarters at USD 14.9 million from USD 11.6 in the previous quarter, mainly due to amortization of USD 3.3 million for Multiclient library.


Interest expense is reduced to USD 2.3 million in Q2 2010 from USD 3.1 million in Q1 2010, partly due to a an adjustment of a reclassification and an error from Q1 2010.


Other financial income of USD 4.5 million for the quarter refers to  unrealized profit on exchange of USD 6.3 million on the NOK 478 million bond loans outstanding, and loss on currency transactions in Naira (Nigerian currency) of USD 0.8 million and unrealized loss on outstanding receivables in Euro.


The income tax of USD 1.6 million in Q2 2010 refers to withholding tax in various jurisdictions where the SeaBird vessels have been operating. This is on the same level as previous quarters.


Net profit after tax in Q2 2010 was USD 1.5 million compared to a net profit of USD 5.7 million in Q1 2010, while Q2 2009 had a loss of 4.9 million.


Capital expenditure was USD 2.8 million during Q2 2010, mainly related to dry docking and classification of Northern Explorer during May.


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. However, the strengthening of USD during Q2 of about 9% had a positive effect for SeaBird.


operational highlights Q2 2010


The vessel utilization for all seismic vessels operated by SeaBird was 76% for Q2 2010, same as for Q1 compared to 80% in Q4 2009 and 55% in Q3 2009.


Utilization in the 2D/3D segment has continued at a satisfactory level during Q2 2010, with only Geo Mariner (shallow water 3D) on idle time for about half of the quarter.


The utilization of the 2D/3D vessels was 71 % in Q2 2010. The 2D vessels Harrier Explorer, Hawk Explorer, Munin Explorer, Aquila Explorer and Osprey Explorer achieved utilization between 71% and 94%, with an average of 86%. Northern Explorer stayed about 6 weeks at a yard for dry docking and classification, thus utilization for the quarter was 32%. The Geo Mariner had utilization of 41%.


The SeaBird's 2D vessels have a satisfactory backlog in the present market environment as of mid August with one vessel Harrier Explorer on time charter to September 2011, whilst Osprey Explorer and Northern Explorer are committed to mid/late Q4. Geo Mariner is on a contract to end December. Hawk Explorer completed a time charter contract on 12 July, with no new contract confirmed yet. She has been relocated from Gulf of Mexico to Algeciras, Spain for better positioning of potential work in West Africa or the Mediterranean. Cost savings have been instigated should no contract materialize in the near term from the tenders submitted.


The Ocean Bottom Node operations have continued with the North Sea Rosebank survey for Chevron, after completing the OBN survey for Chevron in Nigeria on 20 April 2010. The Rosebank survey was completed on 7 August, with yet another successful operation with only one of 750 nodes not delivering data and both Hugin Explorer deploying, retrieving and maintaining the nodes and the accompanying source vessel Kondor Explorer, have continued to perform throughout the Rosebank survey with minimum downtime and high efficiency as in the previous two surveys. The Kondor Explorer has been replaced by Munin Explorer as source vessel for the next OBN operation in Nigeria, and will be cold-stacked for an indefinite period.


Hugin Explorer and Munin Explorer commenced mobilization from Aberdeen 13 August for a new OBN survey in Nigeria for Shell Nigeria Exploration & Production Company Limited with commencement mid September 2010.


SeaBird is actively pursuing further employments for the OBN operation with Hugin Explorer and Munin Explorer following completion of the Shell contract in Nigeria at around mid November.




At 30 June 2010, cash and cash equivalents amounted to USD 5.6 million, compared to USD 15.2 million at the end of Q1 2010, and USD 10.6 million at the end of Q2 2009. Reduced cash during Q2 2010 reflects changes in trade receivables and payables, and reduced EBITDA during the quarter, while the instalment level on bank loans is almost unchanged from previous quarters.


SeaBird has negotiated a short term postponement of USD 6.3 million of bank instalments for the months of June - August 2010. SeaBird has further initiated discussions for a refinancing of its bank debt with the banks, with conclusions expected towards the end of August.             


Net cash flow from operating activities for Q2 2010 was USD 4.2 million against USD 12.7 million for Q1 2010, and USD 8.3 million for Q2 2009. The decrease in net cash flow in Q2 2010 refers mainly to decreased EBITDA and adjustments in trade receivables and trade payables.


Instalments of USD 5.3 million were paid to banks and USD 0.7 million on the lease of Hawk Explorer during Q2 2010.


Net interest-bearing debt (includes cash and currency adjusted debt) decreased to USD 154.9 million end of Q2 2010 from USD 156.1 million end of Q1 2010.


Due to the strong improvement in the EBITDA result in Q1 and Q2 this year the Net Interest bearing Debt / EBITDA ratio covenant in the loan agreements is now in compliance. SeaBird has been able to meet this covenant requirement during the last two quarters on a 12 months accumulated basis despite negative EBITDA numbers in Q3 and Q4 2009.


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 similar to the Hugin Explorer, but without source facilities as this will be covered by a separate vessel. 




The recovery of the 2D has shown some signs of slowing down over the last 2-3 months, mainly due to the aftermath of the GoM oil spill and the financial turmoil in Greece and the Mediterranean countries since May this year. There is however still a reasonable volume of tenders in the market, and an increased number of tenders are expected to come out over the next two- three months. The most active areas seem to be West Africa, the Mediterranean and South East Asia. Improved demand and rate levels will come in later than was expected a few months ago, but further recovery is expected to materialize within a time span of 6-12 months.


Oil prices have remained high even through the latest financial unrest, and there is a continued interest expressed with the oil companies to increase E&P expenditures.


SeaBird remains optimistic about the future OBN sector for fields in deep water with congested seabed and surface infrastructure, 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 one month mobilization for Hugin Explorer and Munin Explorer to Nigeria for Shell, continued low revenue rates on 2D, and potentially 1-2 vessels idle for part of Q3, some reduction in the EBITDA result for Q3 2010 can be expected.





We confirm that, to the best of our knowledge, the condensed set of financial statements for the first half year of 2010, which have been prepared in accordance with IAS 34 "Interim Financial Reporting", gives a true and fair view of the Company's consolidated assets, liabilities, financial position and results of operations. We also confirm that, to the best of our knowledge, the first half 2010 report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the condensed financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year, and major related parties transactions.



The Board of Directors and Chief Executive Officer
SeaBird Exploration PLC
18 August 2010


This information is subject of the disclosure requirements acc. to ยง5-12 vphl (Norwegian Securities Trading Act)