SeaBird Loss Grows

Norwegian seismic player SeaBird Exploration has plunged deeper into the red on cost of sales, impairments and weak demand.

SeaBird generated revenues of $28.1 million in Q4 2014, compared to $38.7 million in the corresponding period in 2013.

The decreased revenues are primarily due to reduced contract rates during the period.

Full year revenues dropped from $177 million in 2013 to $129 million for the year ended December 31, 2014.

Global seismic market demand continued to be soft through the fourth quarter. The decline in oil prices and the cautious spending approach from oil companies delayed contract start-ups and had a negative impact on seismic demand.

The Oslo-listed company reported a net loss of $71.2 million for Q4 2014, compared to net loss of $8.7 million in the same period in 2013.

Net loss for the full year 2014 was $98.8 million, compared to $3.8 million loss in 2013.

Cost of sales was $40.1 million in Q4 2014 ($30.0 million). The increase is predominantly due to non-recurring provisions related to the decision to lay up the Geo Pacific and Voyager Explorer.

“In light of the challenging market, the company decided to lay up two 3D vessels, which will reduce costs and improve vessel utilization,” the company said in a statement.

Depreciation, amortization and impairment were $40.1 million in Q4 2014 ($8.5 million). The impairments are related to vessels ($24.8 million), multi-client library ($5.5 million) and goodwill ($1.3 million).

Furthermore, the company said it expects the current seismic market softness to continue to impact the seismic sector in 2015. However, in longer term, SeaBird believes that continued interest in frontier exploration and the scheduled exit of a number of 3D vessels currently operating in the market will benefit the company.

Additionally, the company thinks its financial restructuring effort also has had a negative impact on contract awards and expect this to improve with the completion of the refinancing.