SeaBird Announces 14 Pct Increase in Revenues

SeaBird Exploration PLC, a global provider of marine 2D/3D/4D seismic data, and associated products and services to the oil and gas industry reports revenues for the third quarter of $51.9 million, an increase of 14% compared to the comparable period in 2012 and up 29% relative to Q2 2013.

Third quarter revenues and earnings were up from the previous quarter driven by improved utilization. Multi-client investment was reduced during the period and contract utilization increased. Fleet repositioning was moderate.

Multi-client sales and investment were down for the quarter. Multi-client utilization was 4% for the period compared to 22% in the second quarter.

The five thousand kilometer multi-client survey in Namibia and the six thousand kilometer survey in the Barents Sea that commenced in the second quarter were completed. In light of the recent Wisting Central hydrocarbon discovery we anticipate increased interest in the Barents Sea survey. Towards the end of the period, Harrier Explorer commenced a one thousand five hundred kilometer multi-client survey in the North Sea in partnership with GeoPartners Ltd.

Contract revenues for the third quarter were up compared to the prior period. Contract surveys during the third quarter represented 82% of vessel capacity compared to 57% for quarter two.

The Geo Pacific continued production throughout the third quarter. Significant improvement in maritime and source performance has been achieved. However, challenging operating conditions as well as technical difficulties related to its acquisition systems reduced the vessel’s production results. The combined effect of these issues resulted in lower than anticipated earnings for the period.

During the third quarter, we completed a series of shorter-term contracts. Standby in between contracts created revenue gaps which negatively impacted earnings.

The Northern Explorer completed its scheduled maintenance docking in July. There were no other dockings during the quarter. Yard stays represented 1% of vessel capacity for the period.

Vessel utilization for the third quarter was 86%, up from 79% in the second quarter.

Operational performance for the quarter was strong. However, our multi-streamer fleet had above-average technical down time. Technical downtime for the fleet was 5%. During the period, the Osprey Explorer was equipped with a new streamer which was installed as the vessel commenced its campaign in South America.

The company delivered another quarter of solid health, safety, security, environment and quality (HSSEQ) results. The lost time injury frequency (LTIF) rate for the period was zero. During the quarter, the company commenced the implementation of a new Institution of Occupational Safety and Health (IOSH) competency training program, targeting both offshore and onshore staff. The internationally recognized safety training qualification provides company staff with the tools to better understand and identify hazards and risks in the workplace. It also provides a framework to increase safety performance.

Regional overview

In the third quarter, geographic revenues strengthened in North and South America (NSA) where the company experienced a significant increase in activity. Revenues in Asia Pacific (APAC) and Europe, Africa and Middle East (EAME) were both up from the second quarter mainly due to reduced vessel repositioning and a decrease in multi-client activity during the period.

NSA sales of $23.7 million represented 46% of total revenues. The increase in NSA revenues was in large part a result of the completion Geo Pacific’s first survey in the Caribbean and the immediate commencement of its second survey in the region. In addition, Hawk Explorer and Osprey Explorer were both active in the region throughout the quarter.

Sales in APAC of $19.8 million accounted for 38% of total revenues. APAC revenues were up compared to the second quarter as Voyager Explorer was fully utilized in the region completing both a 3D survey and two source contracts during the quarter. Aquila Explorer also completed a 2D survey for an oil company in the region and towards the end of the quarter commenced a source contract which will keep the vessel active into the fourth quarter.

Sales in EAME of $8.4 million accounted for 16% of total revenues. Revenues increased compared to the second quarter as Harrier Explorer and Northern Explorer both commenced contract work in this region.

Outlook

Global tender activity in the 2D and the niche 3D markets continued to be healthy during the third quarter. Pricing has remained firm in all regions and we would largely expect this trend to remain through the fourth quarter. We are continuing to see strong demand in our APAC region but demand in select parts of the NSA and EAME regions are showing typical signs of seasonal weakness.

Multi-client demand in the 2D sector is remaining robust. However, late sales are at times taking longer to conclude and prefunding is proving more challenging to secure. Multi-client activity remains a core part of our strategy and we will continue to make select investments in this segment. Higher proprietary contract volume from oil companies compensates for somewhat lower multi-client activity.

Press Release, October 31, 2013