SeaBird Exploration reports 33 per cent revenue decrease in Q1

  • Business & Finance

SeaBird Exploration PLC has announced its financial results for the first quarter of 2014.

SeaBird Exploration reports 33 per cent revenue decrease in Q1


– Revenues for the quarter were $33.7 million, a decrease of 33% compared to the comparable period in 2013 and down 13% relative to Q4 2013.

– Contract revenues for the period were $30.5 million, down 39% from Q1 2013 and down 9% from Q4 2013.

– Multi-client revenues were $3.2 million, up from $0.1 million reported in Q1 2013 and a decrease of 37% from $5.1 million reported in Q4 2013.

– Contract surveys during the first quarter represented 64% of vessel capacity compared to 53% during the fourth quarter 2013.

– EBITDA was $10.2 million compared to $11.5 million for Q1 2013 and $3.9 million for Q4 2013.

– EBIT for the quarter was $2.4 million compared to $5.4 million for Q1 2013 and negative $4.6 million for Q4 2013.

– Vessel utilization for the period was 76% compared to 56% in the prior quarter.

Operational review

Higher utilization and multi-client investment resulted in improved earnings for the period. Enhanced focus on expense management also positively impacted results. Market demand for 2D and source capacity strengthened towards the latter part of the period. However, the 3D segment has been slower to recover. Pricing has remained firm.

Contract surveys represented 64% of vessel capacity compared to 53% for the fourth quarter of 2013. Hawk Explorer and Northern Explorer commenced a joint 20,000 kilometer survey in East Africa. In March, Osprey Explorer initiated a 5,800 kilometer 2D survey in South America. Aquila Explorer completed a 2D survey with a major oil company in Australasia and is continuing to operate within the region. Harrier Explorer and Munin Explorer both performed source operations during the period.

We continue to see demand for source operations and a significant portion of the fleet was employed in this market during the first quarter. There has also been further interest in longer-term contracts as well as framework agreements. During the quarter, we signed a three-year master service agreement with a major industry participant. Moreover, the company executed a letter of intent with TGS-NOPEC Geophysical Company to acquire up to 200,000 kilometers of 2D seismic data in Mexico.

Multi-client sales were lower compared to the previous quarter. The majority of revenues in this segment related to prefunding of Geo Pacific’s West African survey. The remaining portion was primarily associated with late sales from pre-2013 surveys.

Multi-client utilization was 12% for the period compared to 3% in the fourth quarter of 2013. The increased activity relates to the Geo Pacific’s 2,600 square kilometer 3D multi-client program. The survey is anticipated to be completed towards the end of the second quarter.

There were no yard stays or significant upgrades carried out during the period.

Vessel utilization was 76%, up from 56% in the fourth quarter. Operational performance of the fleet was solid, with technical downtime below 4%.

The company reported lost time injury frequency rate of zero. Pre-qualification audits were also completed for two oil companies, with both resulting in the company’s status being upgraded to the highest level.

Regional overview

Revenues in Europe Africa and the Middle East improved significantly from the prior period with half of the fleet active in this region. Repositioning of vessel capacity to the EAME region resulted in decreased revenues in North and South America. Asia Pacific revenues were down slightly from the fourth quarter of 2013 due to reduced multi-client sales. Lower niche 3D demand also impacted this region.

Sales in EAME of $17.1 million accounted for 51% of total revenues. Revenues increased compared to the prior period as Northern Explorer completed a longer contract in the Mediterranean and repositioned to commence a joint project with Hawk Explorer in East Africa. This project will keep both vessels active in the region through the majority of the second quarter. Moreover, Geo Pacific initiated its first multi-client project in West Africa. Harrier Explorer continued its source contract in the North Sea.

APAC sales of $10.4 million accounted for 31% of total revenues. APAC revenues were down slightly compared to the fourth quarter 2013. Aquila Explorer completed a 2D survey with a major oil company and will operate within the region throughout the second quarter. Towards the end of the quarter, Voyager Explorer commenced a 2D project.

Sales in NSA of $6.2 million represented 18% of total revenues. The decrease in NSA revenues was mainly due to the repositioning of the Geo Pacific to West Africa and a delay in contract start-up for Osprey Explorer’s project in South America.


The 2D and source market tender activity improved in the first part of 2014 and the company’s backlog recovered substantially. However, we continue to see delays in permitting as well as commitment of prefunding, which are both impacting the startup of new projects. Moreover, in light of the short visibility in the seismic industry we would like to see the current demand continue for some time before we feel comfortable that the market has fully stabilized.

The recovery in the niche 3D market has been slower to materialize. While we are reviewing a number of potential contract opportunities, the tender activity is below historical market levels.

Pricing in all segments and regions has remained firm and we would largely anticipate day rates to remain stable through the first half of the year.

Given the current levels of prefunding, the company may find it more challenging to identify attractive multi-client opportunities. For existing surveys, late sales are expected to continue but revenues are difficult to predict given the limited size of the library.

Press Release, May 06, 2014


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