Seabird Exploration : SeaBird - Report 4th quarter 2011
02/29/2012| 02:24am US/Eastern
· A Letter of Intent
entered into between SeaBird and Fugro Norway on 3 October
2011 for the sale of the OBN business, completed on 8
December 2011. The transaction also includes two SeaBird
vessels on time charter to Fugro; one for 3 years firm (Munin
Explorer - source) and one for 1 year firm with 1 plus 1 year
optional (Harrier Explorer - 2D), an OBN transition service
agreement for a period of 6 months with an option for another
6 months, and a maritime management agreement for 2 years
with a 2 year automatic extension for the Hugin Explorer.
· Financial restructuring of
SeaBird, approved by secured and unsecured creditors,
consisting in a full repayment to secured creditors (Standard
Chartered Bank and Sparebanken 1 SMN/Glitnir) and a partial
redemption to unsecured creditors (SBX01, SBX02, PGS and
Perestroika), followed by a consolidation of the remaining
bond holdings in SBX01, SBX02 and PGS CLA into a new bond
· The PGS co-operation
agreement for deep water node seismic was brought to an end
upon completion of the restructuring and closing of the Fugro
· An Extraordinary
General Meeting was held on 9 December 2011 whereby five
Directors were honourably discharged and three new Directors
were appointed. The Board now consists of five members. The
EGM additionally resolved to authorise increase of the share
capital up to USD 5 million representing 500,000,000 shares.
· Also on 9 December 2011
the Board of SeaBird announced that it had resolved to issue
139,363,892 new shares through a private placement. The new
shares were subscribed for at a price of NOK 0.25 per share.
Total gross proceeds from the Private Placement amounted to
NOK 34.8 million (approximately USD 6 million). Following the
registration of the new shares, the Company has 314,259,723
· Hugin Explorer and
Munin Explorer commenced acquisition on the ONGC contract on
24 October 2011. The acquisition part was completed and the
vessels demobilised 10 February 2012. The data processing and
interpretation part of the project will be finalised over the
next 12 months.
· Harrier Explorer was in
dry-dock for class renewal during Q4 2011 and subsequently
commenced a source contract in the North Sea in January 2012.
· Voyager Explorer
was fully rigged up to four-streamer operation and commenced
a 2D/3D (combination) contract beginning of November 2011
with expected completion in March 2012. Further backlog until
end of June 2012 is secured.
COMPARISON OF Q4 2011 WITH Q4 2010
Voyager Explorer replaced Geo Mariner in Q3 2011, which
affect the comparable figures to some extent. Furthermore,
the Ocean Bottom Node (''OBN'') business
has been divested and represents the discontinued
operations which will affect the comparable figures.
All figures below relate to continuing operations unless
otherwise stated. SeaBird Group reports a loss of USD 13.7
million for the fourth quarter 2011 (negative USD 34.4
million same period in 2010). Revenues were USD 24.4
million in Q4 2011 (USD 20.5 million). The increased
revenues are mainly due to higher multiclient sales and
higher utilisation for the vessels in Q4 2011 compared to
Q4 2010. Operating expenses were USD 31.3 million in Q4
2011 (USD 25.4 million). The change is mainly due to higher
vessel utilisation and a USD 4.0 million write-off for bad
debts. EBITDA were negative at USD 6.2 million in Q4 2011
(USD 4.9 million). Depreciation and amortisation were USD
7.4 million in Q4 2011 (USD 12.0 million). The decrease is
mainly due to lower multiclient sales amortisation and
impairment of vessels and equipment in Q3 2011 giving lower
base for depreciation in Q4 2011. Interest expense was USD
4.7 million in Q4 2011 (USD 2.3 million). The increase is
mainly due to higher debt level (PGS convertible loan
agreement) and increased interest margins on the loans.
Other financial items, net income, of USD 6.2 million in Q4
2011 (net expense of USD 1.4 million) refer mainly to gain
on extinguishment of debt related to restructuring of the
debt. Capital expenditures were USD 3.4 million in Q4 2011
(USD 1.8 million). Major capital cost items refer to
rigging of the Voyager Explorer to a full four-streamer
vessel, and classification costs for the Harrier Explorer.
A weakening of USD against NOK and EUR has in general a
negative impact on the operating expenses. Interest
expenses and gross debt are from 19 December 2011 only in
USD, hence going forward not impacted by currency
The vessel utilisation for 2D/3D vessels in operation for
the full quarter was 60% in Q4 2011. The OBN vessels had an
utilisation of 93%. Individual vessel details are given in
the Q4-11 presentation document.
LIQUIDITY AND FINANCING
Cash and cash equivalents were USD 13.3 million, of which
USD 3.3 million restricted in connection with
bid/performance bonds, at 31 December 2011 (USD 1.1
million). Net cash from operating activities was negative
USD 47.3 million in Q4 2011 (negative USD 38.4 million),
mainly due to payment of trade payables.
In connection with the debt restructuring taking place in
Q4 2011, the secured creditors, Standard Chartered Bank and
Sparebanken 1 SMN/Glitnir, have been repaid in full. The
bond SBX01, bond SBX02, PGS convertible loan and
Perestroika convertible loan were repaid with approximately
31.4% for each of the mentioned facilities. The remaining
balance of the bonds SBX01, SBX02 and PGS convertible loan
were merged into a new senior secured bond loan (with inter
alia 1st priority pledge in the vessels Northern Explorer,
Osprey Explorer, Harrier Explorer and Aquila Explorer),
SBX03, at an interest rate of 6% p.a. and maturity in
December 2015. After the partial redemption, the
Perestroika convertible loan continues under the same terms
as before the debt restructuring. Furthermore, a credit
facility from Fugro was provided to cover working capital
needed for the ONGC contract.
As of 31 December 2011 the draw down was USD 18 million.
Instalments of USD 1.1 million were paid on the lease of
the Hawk Explorer during Q4 2011 (USD 3.6 million and USD
0.7 million). Net debt and borrowings were USD 107.7
million end of Q4 2011 (USD 172.1 million). SeaBird met all
covenants under the bond loan SBX03 as of 31 December
Following the divestment of the OBN business, SeaBird will
concentrate on the business activities of its 2D and 3D
four-streamer fleet. Idle time was experienced during
Q4 2011, but improving towards end of Q1 2012. Further, we
experience that the general market is improving in 2012.
SeaBird does not rely on multiclient surveys to increase
utilisation, but will contract on such basis if the
economics are preferable to idle time.
A restructuring program has started which will reduce SG&A
and increase efficiency significantly whilst still
maintaining safety across the fleet.
On 6February 2012 a change was announced whereby Mr. Tim
Isden was replaced as CEO by Mr. Dag Reynolds, who is
expected to assume the position by latest 1May 2012. As an
interim measure, Mr. Jan Eivind Fondal has taken the
position of CEO until Mr. Reynolds takes over his duties.
Mr. Reynolds combines an extensive track record in the
industry with in-depth knowledge of the Company. This is a
set of competencies that will be highly valuable in the
Company's continued efforts to reposition itself as a
high end operator in the seismic market.
On 11 February 2012 the ONGC contract was successfully
completed and the handover of the OBN business to Fugro
took place. SeaBird will continue to assist Fugro under a
service agreement until Q2 2012, and the previously
announced time charter agreements and management agreement
are in full force and effect.
A number of contracts were announced February 2012 under
the 2011 Frame Agreement with Spectrum ASA and other
clients, improving backlog for the SeaBird fleet
significantly in 2012. Further, on 13 February 2012
multiclient sales of USD 6.3 million were announced, partly
from late sales and partly from the financial realisation
of non-core assets.
The Board of Directors and
Chief Executive Officer
SeaBird Exploration PLC
28 February 2012
This information is subject of the disclosure requirements
pursuant to section 5-12 of the Norwegian Securities