HIGHLIGHTS – third quarter
- Completed mobilisation to Red Sea and started production together with BGP on Saudi Aramco’s S-78 project
- Production progressing according to plan
- Revenue of USD 13.1 million (resulting from two months of production only) compared to USD 12.8 million in 2015, where USD 4.2 million was related to Multi-client revenues
- EBITDA of USD 3.0 million compared to USD 4.3 million in 2015
- Impairment of asset values of USD 6.7 million primarily related to the conversion from G1 to G2 seismic node technology
- EBIT of USD -7.0 million compared to USD -0.01 million in 2015
- Net Income of USD -8.8 million compared to USD -0.3 million in 2015
- Draw-down of USD 9 million of debt finance from Export Credit Norway and Innovation Norway during Q3 2016
Idar Horstad, CEO Statements;
“This quarter was a busy period for our Artemis Athene crew working on Saudi Aramco’s S78 project in the Red Sea. The cooperation with our partner BGP is progressing well with the two crews working in a coordinated manner to ensure a safe and efficient multi-vessel operation. Production performance to date is according to the project plan -an achievement for a survey of this size and complexity.
The survey location is considered one of the most challenging areas for seismic operations world- wide. The seabed topography is extreme with depths varying from 0 to more than 1000 metres water depth and comprising several smaller islands. We were awarded the project following a careful evaluation of the results of our 2015 pilot survey, which demonstrated that we are one of very few seismic companies with the required equipment to operate safely and efficiently in this area. I recently had the opportunity to visit the operation in Saudi Arabia and was truly impressed with the efforts that our crew and our partner are making to deliver a stellar product in a challenging environment in a safe and timely manner. The data we are collecting are of very high quality and Saudi Aramco is very pleased with the results so far.
The operational experience we have gained during the past three years with efficient operation of large spreads with 3,500-4,000 nodes and up to 350 km of cable in challenging environments combined with the successful development of new deployment techniques and further enhancement of our MASS nodes have convinced me that we are ready to take the next step in our Company’s development.
Staying true to our strategy, the introduction of additional crews will be based on further visibility on securing backlog and the access to financing. Depending on the type of crew and our stock of long-lead items, we can be operational just 6 months after the decision to launch the next crew. As part of our sales efforts, we track the OBS market closely and, based on the tender activity level over the past six months; our confidence in a rapid recovery for 2017 is strong.
At the same time, we are taking a prudent approach to our balance sheet values and are recording a USD 6.7 million impairment this quarter, which primarily relates to the value assigned to our G1 technology. The shift to the new G2 technology has proven very successful and has surpassed our expectations. Therefore we have decided to convert the remainder of our seismic nodes to G2 technology and, as a consequence, have had to record an impairment on the G1 components that have been replaced.
Our main focus in Q4 will be to continue the good operational performance in the Red Sea, and thus, secure further projects in the region while actively pursuing the range of other opportunities we currently see in the OBS market.”
A presentation will be held Friday November 11, 2016, by Idar Horstad (CEO) and Mikkel Ektvedt (CFO) at 08:00 Central European Time (CET) at Hotel Continental, located at Stortingsgata 24-26, Oslo. The presentation is open to the public.
The third quarter and first nine months 2016 earnings release and presentation is available HERE and at Oslo Stock Exchange (www.oslobors.no) website.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
For further information, please contact:
Idar Horstad, CEO
+47 915 36 258
Mikkel Ektvedt, CFO
+47 918 48 488