SeaBird Exploration: estimated Q2 2019 and financial update relating to ongoing surveys
Published August 06, 2019 - 17:00 PM
6 August 2019, Limassol, Cyprus
Reference is made to the press release of 29 July 2019 regarding the ongoing niche 3D survey in West Africa utilizing the “Nordic Explorer” and a 2D survey in the Americas employing the “Harrier Explorer”.
Based on the current estimates for survey completion, the company expects to report an EBITDA for the 2nd quarter of 2019 of negative USD 1.7 million. This includes a loss provision for Q3 2019 of USD 1.3 million relating to the West Africa 3D survey due to the contract being treated as an onerous contract according to IAS 37. The provision is based on an estimated survey completion by mid-September 2019.
Both the “Harrier Explorer” and the “Nordic Explorer” are rigged with the ”Digistreamer” technology and both surveys are affected by difficulties with availability and lead-time of select seismic streamer equipment parts relating to this technology. This includes a significant increase in the repair period for streamer sections compared to historic experience caused by the service offering, repair facilities and inventory level for certain technology components included in the “Digistreamer” all being significantly downscaled post the 2014 downturn. The company placed orders for repair of streamer and for new streamer related equipment shortly after the contract awards. However, the combined effect of worse than expected condition of the “Nordic Explorer” streamer pool equipment (included in the charter-in agreement for the vessel), increased repair period and logistical lead times exceeded the equipment related contingency included in the project plans for the 2D and 3D surveys.
SeaBird will after completion of the projects have a significant pool of repaired and tested “Digistreamer” ready for use. In addition comes a larger pool of Sercel Sentinel streamer. The current “Digistreamer” related problems are therefore not expected to have any effects on future 2D and niche 3D projects.
The ongoing 3D survey in West Africa is estimated to be completed by mid September 2019, more than two months later than the original survey plan, predominantly due to the survey being acquired with two streamers versus four streamers as originally planned. The extended survey duration will result in increased operating expenses and generate an estimated project margin of negative USD 1.4 million.
The ongoing 2D survey in the Americas is estimated to be completed ultimo September 2019 which is about two months later than the original plan. The extended survey duration will result in increased operating expenses and generate an estimated project margin of close to zero.
Further, with reference to the press release of 29 July 2019, the Osprey Explorer is currently transiting to the NCS for a two-month source project with estimated completion late September/early October. This represents a new contract award and is also the first contract with the relevant OBN contractor.
SeaBird is a global provider of marine acquisition for 2D/3D and 4D seismic data, and associated products and services to the oil and gas industry. SeaBird specializes in high quality operations within the high end of the source vessel and 2D market, as well as in the shallow/deep water 2D/3D and 4D market. Main focus for the company is proprietary seismic surveys (contract seismic). Main success criteria for the company are an unrelenting focus on Quality, Health, Safety and Environment (QHSE), combined with efficient collection of high quality seismic data. All statements in this press release other than statements of historical fact are forward-looking statements and are subject to a number of risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. These factors include SeaBird`s reliance on a cyclical industry and the utilization of the company’s vessels. Actual results may differ substantially from those expected or projected in the forward-looking statements.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
For further queries contact:
Hans Petter Klohs
CEO SeaBird Exploration
Phone: +47 22402718
CFO SeaBird Exploration
Phone: +47 22402717