SeaBird Experiences Slow-Down in Fourth Quarter

SeaBird Exploration’s fourth quarter revenues and earnings were down from the previous quarter in light of reduced utilization across the fleet. In addition to normal seasonal variances, global demand for 2D, niche 3D and source seismic surveys was substantially weaker than prior quarters during the year.

SeaBird Experiences Slow-Down in Fourth Quarter

Multi-client sales were significantly higher in the fourth quarter. The increase in multi-client revenues was a result of stronger late sales. A substantial portion of multi-client revenues for the period related to earlier surveys which collectively have limited remaining book value. Approximately 30% of multi-client sales for the quarter related to surveys completed in 2013.

Multi-client utilization was 3% for the period compared to 4% in the third quarter. During the quarter, the Harrier Explorer completed a one thousand five hundred kilometer survey in the North Sea which commenced during the third quarter. In the fourth quarter, the Geo Pacific mobilized for a two thousand six hundred square kilometer 3D multi-client program in West Africa. This survey is anticipated to be completed in the second quarter of 2014.

Contract revenues for the fourth quarter were down compared to the prior period. The weaker contract sales were a result of lower demand across all our geographic focus areas. Contract surveys during the fourth quarter represented 53% of vessel capacity compared to 82% for quarter three.

Although the fourth quarter is typically a slower period for the industry, demand during the period was below normal. In addition, contract postponements resulted in lower than expected contract utilization. In the Asia Pacific region, a 3D contract for Voyager Explorer which was expected to commence in the fourth quarter was cancelled.

During the quarter, the Geo Pacific finished the second of two surveys in the Caribbean. The Aquila Explorer completed a maintenance docking midway through the quarter in preparation for its deployment to Australasia. During the docking, a propulsion upgrade was also completed. Yard stays represented 3% of vessel capacity for the period.

Vessel utilization for the fourth quarter was 56%, down from 86% in the third quarter. Operational performance of the fleet was solid, with technical downtime below 4% for the quarter.

The company’s continuing commitment to health, safety, security, environment and quality (HSSEQ) remained a core focus during the quarter. The lost time injury frequency (LTIF) for the year was 0.23. Measures continue to be implemented as part of SeaBird’s lessons learnt principle for operational improvement.

Regional overview

Fourth quarter revenues were down compared to the prior period in both the Asia Pacific (APAC) and North and South America (NSA) regions. Revenues in APAC and NSA were impacted by reduced demand as well as repositioning. Comparatively, revenues in Europe, Africa and the Middle East (EAME) strengthened.

Sales in APAC of $13.4 million accounted for 36% of total revenues. APAC revenues were down compared to the third quarter as Voyager Explorer finished a 3D survey in the Philippines at the beginning of November and was unutilized for the remainder of the quarter. Aquila Explorer completed two 2D surveys in the region in the first half of the quarter and subsequently underwent a docking in preparation for its Australasia program. The vessel was in transit towards the end of the quarter; en route for a contract with a major oil company offshore New Zealand.

NSA sales of $13.0 million represented 35% of total revenues. The decrease in NSA revenues was mainly due to the repositioning of the Geo Pacific to West Africa after completing its survey in October. In addition, Osprey Explorer completed a 2D survey in the region in early November and remained unutilized for the rest of the quarter.

Sales in EAME of $10.8 million accounted for 29% of total revenues. Revenues increased compared to the third quarter as Harrier Explorer and Northern Explorer were both active in this region during the fourth quarter.


“In spite of the slow-down experienced in the fourth quarter, we are currently seeing a moderate improvement in global seismic demand. Nevertheless, we expect that the market softness is likely to have an impact on earnings in the first part of 2014. Pricing has remained firm in all regions and we would largely expect this to remain stable through the first half of the year,” the Company said.

EAME has seen an increase in demand following the generally slower winter period. With one vessel currently active in the North Sea and three vessels mobilizing to Africa, EAME will be a key region in the first half of 2014 for SeaBird.

“The prolonged environmental approval processes for surveys in Australia and New Zealand have delayed vessel deployment and contract startups within this region. However, we anticipate continued solid demand in this geography.”

“Multi-client late sales were strong in the fourth quarter and we expect to capitalize further on our existing library in 2014. However, timing of multi-client sales is difficult to predict. Furthermore, we continue to see a more challenging environment for obtaining prefunding for new surveys.”

The company views multi-client investment as a core part of its operation and will capitalize on multi-client investment opportunities with attractive risk reward characteristics. They are actively reviewing opportunities in the multi-client sector.

Press Release, February 26, 2014