Electromagnetic Geoservices ASA

Investor Presentation • Aug 16, 2023

Q2 2023 RESULTS

Oslo, 17th August 2023

Bjørn Petter Lindhom, CEO Anders Eimstad, CFO

Disclaimer

This quarterly presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Electromagnetic Geoservices ASA (EMGS) and its subsidiaries. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the EMGS' businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time. Although Electromagnetic Geoservices ASA believes that its expectations and the information in this Report were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this Report. Electromagnetic Geoservices ASA nor any other company within the EMGS Group is making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in the Report, and neither Electromagnetic Geoservices ASA, any other company within the EMGS Group nor any of their directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in the Report. Electromagnetic Geoservices ASA undertakes no obligation to publicly update or revise any forward-looking information or statements in the Report.

Q2 2023

Operational summary

• Atlantic Guardian warm-stacked for the entire quarter

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Financial summary

• Revenues of USD 0.2 million
• EBITDA of negative USD 1.1 million
• Adjusted EBITDA of negative USD 1.8 million

Operations and Market

Market update

• Securing backlog, while being a top priority for EMGS, has proven to take significantly longer than expected
• Norwegian EM market remains slow
  • Oil companies focusing on ILX
  • Recent M&A has reduced number of potential clients
  • Expansion of the APA round area in the Western Barents Sea
  • Discussions about 2024 NCS projects ongoing
• Significant interest in EM outside Norway, but the length of the sales cycle has increased
• Increased interest in using EM for non-hydrocarbon applications including CCS, marine minerals, geothermal, geotechnical etc.

Financial position remains strong

• Financial position remains strong despite a disappointing Q2
• Available cash at end of Q2 was USD 13.5 million
• Convertible bond loan remains at approximately USD 19.5 million
• Book value of the multi-client library was USD 1.2 million
• Equity at USD 5.9 million

3 success factors – why CSEM now can do more than ever

1. Deep Blue Source

• Up to 10 000 Ampere
• 1.5 MW power
• Wideband (0 50Hz)
• Depth rated to 4 000m
• 1. New inversion algorithm
  2. Gauss-Newton algorithm (2018-20)
  3. Solves for resistivity (anisotropic) and dip angle (2021)
  4. Start model independent
• 1. New data Interpretation and Integration workflow
  2. Prospect risk and volume update
  3. Rock physics framework
  4. Scenario testing
  5. Developed workflow for field wide saturation/net-pay

Second quarter 2023 performance I Development in revenues and EBITDA

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• Revenues
  • USD 0.2 million total revenue
• Vessel utilisation of 0%
  • Atlantic Guardian warm-stacked for the entire quarter
• EBITDA
  • USD negative 1.1 million
  • Adjusted EBITDA* of negative USD 1.8 million

*Adjusted EBITDA includes capitalised multi-client expenses and vessel and office lease expenses

Operational costs

Quarterly operational cost base* development (USD million)

Comments

• Operational costs base in Q2 23 of USD 2.0 million
  • USD 0.6 million lower than Q1 23

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• The Atlantic Guardian was warm-stacked for the entire quarter
• Continued low charter hire, fuel and crew expenses as a result of low vessel activity level in the first half of 2023
• Vessel and office lease remains low as a result of lower charter rate for the Atlantic Guardian while the vessel is warm-stacked

*Cost base is defined as operational costs (charter hire etc, employee expenses, other operating expenses) plus MC investments and vessel and office lease payments presented as financial leases from 1 January 2019, restructuring charges and other extraordinary items

Decrease in free cash in Q2 2023

• Net decrease in free cash of USD 0.8 million to USD 13.5 million
  • Negative Adjusted EBITDA of USD 1.8 million
  • Trade receivables decreased by USD 2.7 million as compared to the previous quarter
  • Trade payables decreased by USD 0.2 million
  • Vessel and office lease expense of USD 0.7 million
  • PP&E investment of USD 0.4 million

Q & A

Please e-mail questions to: emgs@emgs.com