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  • Revenues for the quarter were $48.6 million, an increase of 42% compared to the comparable period in 2012 and up 39% relative to Q4 2012.
  • Contract revenues for the period were $48.5 million, up 92% from Q1 2012 and up 41% from Q4 2012.
  • Multi-client revenues were $0.1 million, a decrease of 99% from $9.1 million reported in Q1 2012 and a decrease of 75% from $0.4 million reported in Q4 2012.
  • EBITDA was $11.1 million compared to $2.9 million for Q1 2012 and $6.8 million for Q4 2012.
  • EBITDA adjusted for operating expenses relating to the Geo Pacific would have been approximately $16.0 million.
  • EBIT for the quarter was $5.1 million compared to negative $8.7 million for Q1 2012 and $0.9 million for Q4 2012.
  • The company completed the private placement repair issue of 1,500,000 new shares; total gross proceeds of NOK 11.3 million ($2.0 million).
  • The multi-streamer 3D vessel Geo Pacific was successfully upgraded and performed sea trials during the quarter. SeaBird announced Geo Pacific's first contract in the Caribbean, which will commence in Q2 2013.
  • Available vessel utilization for the period was 88%.

Operational review

Continued strength throughout the operation resulted in a solid first quarter for SeaBird, that included substantial start-up costs associated with the chartering of the Geo Pacific and that normally is affected by seasonal weakness. Day rates remained firm and utilization was robust. Demand from seismic companies was strong but we also continue to see solid demand from oil companies.

During the quarter, the Geo Pacific was dry-docked and upgraded for increased power output and modified to reduce drag. The vessel performed successful sea trials with increased speed in preparation of the announced contract in the Caribbean commencing in Q2 2013. The EBITDA contribution from the Geo Pacific was negative $4.9 million for the quarter as the vessel was being prepared for its initial contract. We have seen healthy market interest for the vessel to date and are looking at a number of follow-on contract options in Central America, North-West Europe and Africa after the initial contract in the Caribbean is completed. Demand in the niche 3D seismic market has remained firm and the Voyager Explorer together with the Geo Pacific will continue to service this market.

Multi-client sales were minimal during the quarter. The limited size of the company's multi-client portfolio is likely to result in significant fluctuation in multi-client sales going forward. The company is committed to selectively increase its investment in multi-client surveys to better balance supply and demand in the contract market as well as to capitalize on multi-client investment opportunities with attractive risk reward characteristics. During the quarter, SeaBird recommenced a 2D multi-client survey covering approximately 3,000 km offshore Barbados in co-operation with MultiClient Geophysical ASA, which is the final part of a survey started in 2012. SeaBird also recently announced a new 2D multi-client project offshore Namibia in partnership with GeoPartners Ltd. This acquisition program is approximately 4,700 km and will commence in Q2 2013. Additionally, SeaBird is in partner discussions on several new multi-client projects.

During the quarter, we saw continued demand in the source market. The company is currently bidding for several new short-term contracts for 2013 and expects interest in this segment to increase going forward. The source market continues to be a key focus for SeaBird and a natural extension of the company's core business. In addition to being a natural fit with SeaBird's fleet, the source market also improves the company's ability to further optimize crew, vessel and seismic equipment utilization.

First quarter vessel utilization for the available fleet was 88%. This excludes the Geo Pacific which was being upgraded during the period as well as the Kondor Explorer which is in dry dock. The reported utilization is a significant increase compared to the same period in 2012 as well as the prior period. During the first quarter, the company also completed two dockings for engine overhauls.

From an operational viewpoint, technical downtime was less than 4% during the quarter. This is below industry norms and in spite of a number of vessels operating within challenging environments. The 3D campaigns in Australia and New Zealand were particularly successful in terms of both client satisfaction and a technical downtime of less than 2%.

The organization has been further strengthened in Q1 2013 with the addition of experienced 3D sales, operations and offshore employees, supporting the expansion of SeaBird's fleet and position in the niche 3D market.

SeaBird delivered another quarter of solid health, safety, security, environment and quality (HSSEQ) results. The company's lost time injury frequency (LTIF) rate was zero for Q1 2013 and confirms the high level of HSSEQ culture and system implementation within the company. Our continued focus on improving best practices not only resulted in industry-leading safety results but also delivered best-in-class performance. Reported client satisfaction has been strong, with notable commendations from major customers. During the quarter, SeaBird commenced an effort to analyze past performance with an intention to further improve the HSSEQ processes and defining 2013 HSSEQ targets.

Regional overview

In the first quarter, geographic revenues were strong across all our operating regions - Europe, Africa and Middle East (EAME), North and South America (NSA) and Asia Pacific (APAC). The North Sea seasonal weakness kept EAME revenues at a moderate level, while revenues in the APAC region increased further compared with Q4 2012 as a result of attractive day rates and high utilization.

Sales in EAME of $13.5 million accounted for 28% of total revenues. The level of revenues was higher than Q4 2012, but still lower compared to prior periods as a result of the North Sea seasonal effect. During the quarter, SeaBird completed a long-offset 2D survey off the coast of South Africa.  Another South African survey has been extended and will keep the company active in the area for the main part of Q2 2013. The company also commenced a 2D survey in West Africa.

NSA sales of $12.1 million represented 25% of total revenues. The majority of revenues earned in this region were derived from two long-term 2D contracts in South America. During the quarter, the company negotiated an early termination of the current contract on the Harrier Explorer and subsequently contracted the vessel to a multi-client survey in the region.

Sales in APAC of $23.0 million accounted for 47% of total revenues. A significant portion of these revenues are attributable to SeaBird's 3D multi-contract campaign for several New Zealand and Australian oil companies. Moreover, we continued with a large 2D survey in Australia which we commenced in 2012. Additionally, we performed a short-term source vessel contract in the region during the period.


Market demand was strong in the first quarter and we continue to see solid activity in both the 2D and niche 3D seismic markets. We expect the current market environment to remain through 2013 and we see demand staying strong in all of our operating regions. The client mix of oil companies together with seismic companies is expected to continue. SeaBird's HSSEQ accreditations and systems ensure that the company is qualified to work for all industry participants.

Day rates have remained strong through the first quarter and we see no signs of this abating. We would expect rates to stay at current levels and possibly increase to the extent vessel availability remains constrained.

Backlog is expected to stay relatively stable. However, given the short-term nature of many of our contracts, we may see fluctuations in backlog from time to time. Moreover, while we complete work under existing long-term contracts, backlog under these agreements will be reducing, but may subsequently be replaced with new agreements at the end of the contract period.

We expect to commence additional work in the multi-client space and we will generally be doing this in cooperation with one or more partners.

The source market demand is continuing to show positive developments. Day rates are attractive albeit contract terms are still relatively short.


Financial comparison

All figures below relate to continuing operations unless otherwise stated. For discontinued operations, see note 1.

The company reports a profit of $1.5 million for the first quarter 2013 (loss of $12.5 million same period in 2012).

Revenues were $48.6 million in Q1 2013 ($34.3 million). The increased revenues are mainly due to increased contract day rates and higher fleet utilization, offset by lower multi-client revenues.

Cost of sales was $33.1 million in Q1 2013 ($27.2 million). The increase is primarily due to the chartering of the Geo Pacific and the higher operating costs associated with surveys in the Australasian region relative to other regions. The cost increase was offset by MCG multi-client prefunding of the Barbados survey ($1.2 million).

SG&A was $4.6 million in Q1 2013, down from $4.9 million in Q1 2012. The decrease is principally due to the organizational restructure and cost savings initiative implemented during 2012. As part of an ongoing tax review, the company has evaluated it tax domicile and structure. During the quarter, $0.3 million of consultancy costs related to this exercise have been recognized as selling, general and administrative expenses.

EBITDA was $11.1 million in Q1 2013 ($2.9 million).

Depreciation and amortization were $6.0 million in Q1 2013 ($11.6 million). The decrease is predominantly due to lower multi-client sales amortization for the period.

Interest expense was $3.0 million in Q1 2013 ($3.1 million).

Other financial items, net expense, of negative $0.1 million in Q1 2013 (loss of $0.4 million). The change is mainly due to currency fluctuations.

Income tax expense was $0.6 million in Q1 2013 (expense of $0.3 million). The increase is mainly due to increased profits for subsidiaries required to file within the Norwegian tax jurisdiction.

Capital expenditures were $6.8 million in Q1 2013 ($1.3 million). Major capital cost items for the quarter included the docking and upgrade of the Geo Pacific, engine overhauls for the Voyager Explorer and Hawk Explorer and purchasing of seismic equipment across the fleet.

Multi-client investment was $0.2 million for the quarter ($3.0 million), which is related to the 2D Barbados multi-client survey.

Net loss from discontinued operations was $0.5 million for Q1 2013 (gain of $5.3 million). Discontinued operations represent the remaining contractual obligations of the ocean bottom node (OBN) business which was divested in Q4 2011.

Liquidity and financing

Cash and cash equivalents at the end of the period were $16.5 million ($13.7 million), of which $2.8 million was restricted in connection with bank guarantees, deposits and the bond service account. Net cash from operating activities was positive $7.9 million in Q1 2013 (positive $5.5 million).

Following the equity offering completed in November 2012, the company issued 1,500,000 new shares at a subscription price of NOK 7.50 per share. Gross proceeds from this transaction were NOK 11.3 million ($2.0 million). The transaction closed in February 2013 and was targeted towards shareholders who did not have the opportunity to participate in the private placement of 2012.

The company has one bond loan, one convertible loan and the Hawk Explorer finance lease.

  • The 6% secured bond loan has a face value of $87.9 million and is recognized in the books at amortized cost of $77.2 million per Q1 2013. The bond loan matures 19 December 2015 and has principal amortization due in semi-annual increments of $2.0 million starting 19 December 2012.
  • The 1% unsecured convertible loan with Perestroika has a face value of $14.9 million and is recognized in the books at amortized cost of $12.9 million per Q1 2013. The convertible loan matures 30 September 2014 and has no principal amortization. Interest on the convertible loan is paid annually. No interest was paid during Q1 2013 in relation to the convertible loan.
  • The lease of Hawk Explorer is recognized in the books as a finance lease at $12.2 million per Q1 2013. Installments of $0.9 million against the Hawk lease principal and $0.4 million against the interest portion were paid during Q1 2013 ($0.8 million and $0.4 million in 2012, respectively).

Net interest-bearing debt was $85.9 million at the end of Q1 2013 ($90.9 million).

Accrued interest for Q1 2013 was $1.4 million (Nil).

The company was in compliance with all covenants as of 31 March 2013.

The Board of Directors and Chief Executive Officer
SeaBird Exploration Plc
2 May 2013

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.