SeaBird narrows its third quarter net loss

SeaBird Exploration, a provider of seismic services to the oil and gas industry, has tightened its net loss in the 3Q 2015 when compared to the same period last year, as the company focused on reducing costs and increasing financial flexibility.

Namely, SeaBird reported a net loss of $1.7 million for 3Q 2015, versus net loss of $20.2 million in the same period in 2014.

Revenues for the quarter were $23.2 million, an increase of 2% compared to $22.7 million in 3Q 2014 and up 19% relative to Q2 2015.

EBITDA was $4.6 million compared to negative $2.1 million for 3Q 2014 and negative $6.5 million for 2Q 2015.

The company’s capital expenditure for the quarter was $1.7 million, versus $2 million in 3Q 2014.

In its third quarter results report on Thursday, SeaBird said that the third quarter was characterized by sustained low oil prices and weak market sentiment for oil exploration. Seismic tender activity has continued to be sluggish with intense price competition, the seismic company added.

Furthermore, the 2D/source market has continued to experience significant competition from multi-streamer 3D vessels. The negative market sentiment has exacerbated industry risk factors and increased the uncertainty related to timing of a market recovery, SeaBird said.

Vessel utilization for the period was 86%, up from 68% in the previous quarter, and up from 65% in the 3Q 2014. SeaBird says the increase is due to technical start-up challenges for the four vessels operating in Mexico, on the Gigante survey. Another vessel, Aquila Explorer is scheduled to join during the fourth quarter.

According to SeaBird, multi-client surveys represented 0% of vessel utilization in the quarter compared to 30% in the same quarter previous year.

Cost cuts

The company continued its cost reduction effort in the third quarter and the office in St. Petersburg was closed at the end of the quarter. Operating expenses are reduced as a result of the stacking of vessels and the continuing effort to execute on the savings initiatives.

The lay-up of 3D vessels and Munin Explorer, reduced operating expenses, lower project activity, reduced vessel charter rates and lower crew headcount were the primary areas that contributed to bring down costs of sales relative to 2014 and Q2 2015.

Regarding its cost-cutting initiatives, SeaBird said it was undertaking crew costs improvements and that the process to reduce crew headcount, in line with reduced fleet, was ongoing and would be completed in 4Q 2015.

Outlook

Global seismic demand continued to show weakness in the third quarter and there are no signs of market improvement, SeaBird said.

The company further elaborated by saying: “Oil industry spending is anticipated to remain sluggish through 2016 and the seismic sector is expected to remain under pressure as a result.”

A high proportion of the company’s fleet is expected to be employed on the Mexico Gigante project until mid-2016 assuming the full project size of approximately 186,000 kilometer is to be completed.

Offshore Energy Today Staff