SeaBird’s Loss Widens

SeaBird, a global provider of marine 2D and 3D seismic data for the oil and gas industry, has delivered results for the second quarter of the 2014. The company reported a net loss of $7.9 million for Q2 2014 (loss of $4.1 million in the same period in 2013).

The loss for the first half of 2014 was $8.5 million, compared to a loss of $2.3 million in 2013.

Revenues were $44.7 million in Q2 2014 ($37.6 million). The increased revenues are primarily due to higher vessel utilization and lower multi-client activity during the period.

Revenues for the first half of 2014 were $78.4 million compared with $87.6 million for 2013.

Second quarter revenues increased from the prior period as a result of solid 2D and source vessel performance. However, demand in the niche 3D segment has been slower to recover.

Market demand in the 2D segment was strong entering the second quarter, resulting in high utilization in the first half of the period. However, SeaBird has seen increasing competition from 3D vessels entering the 2D and source markets. Additionally, the overall 2D market activity has moderated as of late. While SeaBird does not see a longer-term change in market demand, the company expects the current situation to negatively impact the company’s third quarter.

SeaBird has seen an increased interest in entering longer-term contracts and framework agreements, and positive developments in the source market which is supported by growth in the ocean bottom seismic sector. The company expects that the source market will remain an important part of fleet utilization going forward.

The niche 3D market is still to recover and the tender activity remains below historical market levels.

Pricing in all segments and regions has generally remained firm, but SeaBird believes that the current market situation may selectively have a negative impact on pricing in the second half of the year.

Multi-client late sales have been slower to materialize and securing prefunding for new projects has been taking somewhat longer. SeaBird continues to see multi-client activity as a core part of its strategy and will continue expanding its efforts in this segment.

Important events in the first half of the year

During the first half of 2014, the company 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.

During the quarter, SeaBird extended the bareboat charter for the Voyager Explorer from 17 August 2014 to 17 August 2016 at a fixed rate of USD 13,200 per day with three one-year options to extend the contract beyond the fixed charter period.

Recently, the company announced that it will close down its office in Dubai and transfer activities to other offices. This effort will help to enhance management oversight, improve business processes and reduce costs.

On 3 April 2014, Mr. Åge Korsvold was elected chairman of the board, replacing Mr. Henrik Christensen. Mr. Korsvold is currently a board member of i.a. Timex Group B.V., Vardia ASA, Green Resources AS and Aweco Invest AS.

Press Release, August 15, 2014