Argeo AS

Investor Presentation • Nov 17, 2022

Digitizing the ocean space

Argeo Q3 company presentation

17 November 2022 TROND FIGENSCHOU CRANTZ, CEO ARGEO ODD ERIK RUDSHAUG, CFO ARGEO

Disclaimer

• This presentation includes and is based on, among other things, forward-looking information and statements
• Such forward-looking information and statements are based on the current expectations, estimates and projections of Argeo or assumptions based on information available to the company
• Such forward-looking information and statements reflect current views with respect to future events and are subject to risks, uncertainties and assumptions
• Argeo cannot give any assurance as to the correctness of such information and statements

Agenda

Highlights

Introduction to Argeo

Operational update

Commercial & Market update

Technology

Financials

Outlook

Side 3

Highlights

Agenda

Introduction to Argeo Operational update Commercial & Market update Technology Financials Outlook

Highlights

Q3 Highlights

• SeaRaptor "Bravo" completed ultra-deep water AUV survey work
• Hugin 6000 commenced work on the previously announced contract

Later events

• 5-year bareboat contract for vessel Argeo Searcher with option to buy
• First contract for Argeo "Argus" with very good performance
• Argeo Searcher contract work in the North Atlantic for Deep Sea Minerals
• Argeo received patent application approval for our unique EM sensor systems
• Argeo SCOPE launched as a product line

Highlights

Business development

• Argeo's fleet has grown, and new assets has been brought into commercial operations
• The company is now well positioned for several large contracts

Markets

• Current project pipeline in South America for 2023 is now exceeding 300 MNOK and close to award
• In our other geomarkets our pipeline is smaller but steadily increasing

Finances

• Financially we expect to be EBITDA positive in the second quarter of 2023
• We are targeting an EBITDA for next year at 50 MNOK or higher
• Larger contracts expected to be awarded will start up during first quarter of 2023
• Expect slight improvement in the fourth quarter, mostly contributed by the Hugin 6000 project

Agenda

Introduction to Argeo Operational update Commercial & Market update Technology Financials Outlook

Highlights

High capability robotics solutions

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Our mission

Argeo's mission is to transform the ocean surveying and inspection industry utilizing autonomous underwater and surface vehicles, and unique sensor and imaging technology, to significantly increase efficiency and quality, and substantially reduce the industry CO2 footprint.

Unique sensor technology and powerful 3D cloud-based visualization

Faster, better, greener, and at a lower cost

Robotics and digital solutions for the ocean space Four attractive key markets

Agenda

Highlights Introduction to Argeo

Operational update

Commercial & Market update Technology Financials Outlook

Robotics and digital solutions for the ocean space Technology enabled service provider

FLEET UPDATE

Steadily developing our fleet to meet market demand

AUV & ROV SURVEY & INSPECTION VESSEL

Argeo Searcher is an effective multipurpose AUV/ROV survey vessel with an excellent track record for several O&G clients worldwide since delivered in 2001/2006

Argeo Searcher

Vessel info

• Length 108,6m x breath 18m
• Class: DNV, HELDK DYNPOS -DPS2
• Long endurance diesel electric propulsion
• OSM Vestland Management
• Capacity for 65 persons onboard
• FRC: Norsafe with diesel waterjet propulsion
• Helideck for Super Puma 9.3t

Survey Spread

• AUV: 1 x SeaRaptor 6000
• ROV: 1 x WROV/Observation/Survey (option)
• Instrumentation and acoustic positioning (SON/HIPAP)
• Dedicated instrument/operations room
• Computerized onboard data processing center
• Client office space and conference room
• Marlink VSAT communication

Specifications

Speed and fuel consumption

• Service speed 12 knots max
• Fuel capacity 1600 m3
• Endurance operation 200 days in operation Fuel consumption
• Operation DP: 7 m3
• Transit (10 kn): 15 m3

Strategic development to meet global demand in the subsea sector

Capitalizing on the Offshore Energy Supercycle to expand business and scale our global service offering

offer full scale subsea services, undertaking larger scope-of-work for clients going forward.

Argeo Argus USV

FIRST COMPLETED PROJECT WITH VERY GOOD PERFORMANCE

"

Argeo is the first company to commercialize this particular solution, and we are pleased the market is responding well asking for discussions to engage our new USV

Uncrewed, remotely supervised survey and inspection vessel

• Fully Uncrewed Surface Vehicle (USV)
• Dimensions: 9x3 meters
• Launched June 16th, 2022
• First commercial project October 28'th 2022

New Hugin 6000

COMMERCIAL 6+6 MONTH PROJECT ONGOING IN INTERNATIONAL WATERS

"

We are pleased to confirm that the project is going according to plan and brings this hispecification into commercial work for the customer.

12-month project with net value of 4,5 MUSD

• Ongoing project from September 1st, 2022
• Minimum guaranteed duration of 6-months
• 6-month extension, with estimated completion in H2 2023
• EBITDA contribution for full 12 months of 4.5 MUSD

First Argus project

Focused USV based acquisition project

Project details may be provided in our Q4 presentation or in a separate session due to the project's sensitivity. Hoverer, the project stats are excellent with 98% production performance of multi-physics data acquisition in a constrained area.

Argeo was contracted by Multiconsult to survey an area in Norway for an industrial project. Argeo was responsible for planning, execution, data processing, interpretation and reporting.

The project was carried out using Argeo's Argus USV

Illustration: Seismic line data acquired with Argus USV

USV project for renewables industry

USV project controlled from Argeo Remote

Argeo positioned in the entire offshore wind value chain

WIDE-RANGING SURVEY AND INSPECTION USE IN OFFSHORE WIND

Argeo's solutions accelerate offshore wind development

ENABLING FASTER RENEWABLES SOLUTIONS

Agenda Highlights Introduction to Argeo Operational update Commercial & Market update Technology Financials Outlook

Tenders and project pipeline solidifying

Argeo Fleet Update Q3-2022

E&P spending expected to increase significantly

ALONGSIDE SIGNIFICANTLY EXPANDING GLOBAL OFFSHORE CAPEX SANCTIONING

E&P spending (Y/Y) Global capex sanctioning (USDm)

Argeo's growth and expansion into new geomarkets are driven by further growth in E&P spending (17% in 2022)

Positioning key assets strategically to capitalize on stronger subsea activities supports faster mobilization and cost-effective operations

With global offshore sanctioning up 8% in 2022 and a further increase to 37% in 2023, Argeo is perfectly positioned to capitalize on this strong growth to support our fleet expansion going forward

Brazil project sanctioning increase significantly 2023-2026

ARGEO BRASIL BUSINESS EXPANSION FOCUSING ON STRONG GROWTH MARKETS

• 12 awarded projects starting from Q2 2022 Q3 2025
• Further 11 project on tender with expected start2023 2025
• Growing decommissioning requirement in brownfields
• Confirmed 15 new FPSOs from 2022 2026
• Significant number of add-on IMR and survey services
• Water depth range from 100 3000 meters

Tighter supply and growing rates

• Very tight market going forward with further strengthening rates (2023-2024)
• Typical OSRV/RSV rates edging beyond 50 000 KUSD (TC)
• Complete spread & vessel pushing 90 000 KUSD -> 2023

O&G Subsea market (Survey & IMR) Sanctioned FPSO projects 2022-2026

Deep Sea Minerals

Status Norway

Fast point-cloud MBES data handling

Argeo SCOPE– NPD dataset sneak peek Argeo SCOPE

– NPD dataset sneak peek

Side-Scan / SAS data draped over bathymetry Physical Oceanography Data

Data Management – Argeo SCOPE

Agenda

Highlights Introduction to Argeo Operational update Commercial & Market update Technology Financials

Outlook

Mission Controlled Operation for USV & eROV

ARGEO MISSION CONTROL CENTRE

Global Mission Control: Supporting client on-prem or containerised Supervised operations providing 100% mission support and backup

ARGEO'S ROBOTIC TECHNOLOGY Unique in-house patented Electro Magnetic sensor technology

"Argeo Listen" measure the position and strength of electricity in objects on the seabed.

CATHODIC PROTECTION

Zinc sacrificial anodes are used to protect pipelines and subsea installations from corrosion. The anodes corrode in stead of the pipeline and needs to be replaced from time to time. By flying Argeo's AUV over the pipe Argeo Listen measure and identify the condition of these anodes and predict the need for replacement.

INSPECTION

Argeo Listen can localize electrical cables that have been buried or exposed by shifting sand dunes on the seabed. The tool can also be used to pinpoint the cable's position in real time even when buried.

"Argeo Whisper" sends out electrical signals from the AUV detecting objects with a higher level of electrical conductivity or higher resistance than its surroundings.

PIPELINE AND OBJECT TRACKING

Traditional use of AUV's cannot locate buried pipelines. By sending out electrical signals and identifying the location of the reflection and signal strength the tool can decide direction, position and depth of the pipeline.

UXO

With "Argeo Whisper" one can identify and locate objects containing metals, typically unexploded ordnance, with an AUV rather than using a large vessel and tethered magnetometers.

"Argeo Discover" is developed to search and find minerals and smaller objects than the Argeo Whisper can locate as it is 5 times as powerful.

DEEP-SEA MINERALS EXPLORATION

Deep-sea minerals can be separated from its surroundings as it has a higher level of electrical conductivity. Argeo Discover can detect these minerals and determine the extent of the deposits.

In some cases, one AUV will push signals out and another AUV will listen for the reflection.

ARGEO ENLIGHT ARGEO INTROSPECTION ARGEO FORESIGHT

OPTIMIZING VALUE FROM OCEAN DATA

SUBSEA ASSET DIGITALIZATION, VISUALIZATION AND ANALYSIS ENABLED

The main tool for data processing and visualization of data in addition to our Multi-Client data shopping window

3D visualization and mapping of subsea inspection data fully interpreted

Georeferenced in space and time

Prediction of subsea movements and remaining lifetime of assets based upon trends in data measured over time

Argeo SCOPE

Fast and performant 3D visualization of vast amounts of ocean space data in the cloud, supporting a collaborative data sharing and interpretation workflow.

Seamless data fusion from seabed measurements such as:

• Synthetic aperture sonar (SAS)
• Sub-bottom profiler (SBP)
• Backscatter
• Bathymetry
• EM intensity along pipelines using Argeo Listen

Agenda

Highlights Introduction to Argeo Operational update Commercial & Market update Technology Financials Outlook

Income Statement

Amounts in NOK 1 000	Q3-2022	Q3-2021	YTD 2022	YTD 2021	2021
Operating revenue	6 535	3 406	22 743	15 411	15 842
Operating cost	5 427	4 411	23 239	11 518	17 439
Employee expenses	15 612	5 230	44 166	11 012	22 662
Other operating expenses	3 426	2 543	12 948	6 732	8 755
Capitalisation of cost	-2 940	-1 445	-17 876	-2 284	-6 367
EBITDA	-14 990	-7 333	-39 734	-11 567	-26 647
Depreciation	3 888	304	7 068	911	1 276
EBIT	-18 877	-7 637	-46 803	-12 478	-27 924
Net financial items	-9 608	-510	-13 206	-488	-38
Profit/(loss) before tax	-28 486	-8 147	-60 009	-12 966	-27 962
Income tax (expense)	6 209	1 756	13 123	2 806	9 848
Profit/ (loss) for the period	-22 276	-6 391	-46 886	-10 160	-18 113

• Revenue in Q3 2022 is from the AUV deep water work with Bravo in July and from our new Hugin 6000 in September.
• Total expenses in Q3 2022 NOK 24.5 million, down from NOK 33.0 million in Q2 2022.

Decrease is mainly due to having a vessel on charter in Q2.

• Net financial items includes NOK 10 million unrealized exchange loss on the seller's credit nominated in USD

Balance Sheet

Amounts in NOK 1 000	30.09.2022	30.09.2021	31.12.2021
ASSETS
Intangible assets	22 208	5 783	7 647
Deferred tax asset	23 382	3 117	10 259
Multi-client library	4 000	0	0
Property, plant and equipment	222 315	68 346	3 965
Shares in associated companies	5 091	5 754	5 479
Total non-current assets	276 997	83 000	27 350
Trade receivables	757	7 726	6 164
Other current assets	4 540	1 877	67 964
Cash and cash equivalents	42 458	78 955	65 862
Total current assets	47 755	88 558	139 990
Total assets	324 752	171 558	167 340
EQUITY AND LIABILITIES
Equity	171 523	156 004	148 051
Long term debt	121 822	6 273	5 933
Total non-current liabilities	121 822	6 273	5 933
Trade payables	13 694	5 598	6 288
Other current liabilities	17 713	3 682	7 068
Total current liabilities	31 407	9 280	13 356
Total liabilities	153 229	15 554	19 289
Total equity and liabilities	324 752	171 558	167 340

• Intangible assets includes capitalized cost to Argeo Scope and the other development projects.
• PPE includes two SeaRaptor's, one Hugin 6000 and Argus USV.
• Long term debt is mainly seller's credit on 3 AUV's.

Page 37

Cash flow statement

Amounts in NOK 1 000	Q3-2022	Q3-2021	YTD 2022	YTD 2021	2021
Cash flow from operating activities
Profit/(loss) before tax	-28 147	-8 147	-60 009	-12 966	-27 962
Depreciation	3 888	304	7 068	911	1 276
Financial income	-55	0	-58	0	-89
Financial expense	8 853	66	12 877	204	433
Gain/loss equity investments	293	149	387	195	471
Change in current assets	67 294	4 672	68 831	-3 294	-69 420
Change current liabilities	12 807	-3 383	18 051	-7 386	-1 810
Net cash from operating activities	64 932	-6 339	47 148	-22 336	-97 101
Cash flow from investing activities
Investment in property, plant and equipment	-162 506	-37 555	-224 505	-68 458	-3 687
Investment in intangibles	-2 634	-1 445	-15 474	-2 284	-4 903
Investment in Multi-client	0	0	-4 000	0	0
Net investment in associated companies	0	0	0	-5 871	-5 871
Sale AUV to associated company	0	0	0	10 838	10 838
Net cash from investing activities	-165 140	-39 000	-243 980	-65 776	-3 624
Cash flow from financing activities
Net proceeds from new equity	0	0	70 358	159 911	159 911
Proceeds from new debt	92 354	0	122 743	0	0
Repayment of interest-bearing debt	-16 557	-340	-20 478	-420	-760
Financial income	55	0	58	0	89
Financial expense	-147	-66	-443	-204	-433
Net cash flow from financial activities	75 706	-406	172 238	159 287	158 807
Net change in cash and cash equivalents	-24 502	-45 745	-24 594	71 175	58 082
Cash and cash equivalents beginning of period	65 958	124 699	65 862	7 780	7 780
Net currency exchange differences	1 002	0	1 190	0	0
Cash and cash equivalents end of the period	42 458	78 955	42 458	78 955	65 862

• Positive change in current assets in Q3 22 mainly due to pre-payments in Q2 22 on equipment which was delivered in Q3 2022.
• Investment in PPE NOK 162.5 million in Q2 2022 is mainly for SeaRaptor Bravo, Hugin 6000 and Argus USV.
• Investment in intangibles NOK 2.6 million in Q3 2022.
• New debt is seller's credit on the two AUV's delivered in Q3 2022
• Repaid NOK 16.5 million seller's credit and other debt in Q3 2022.

Summary

Fleet growth, and new assets has been brought into commercial operations.

Qualified in the most important geomarkets and well positioned for several large contracts.

Strong market outlook in O&G and renewables

Rationale

• Attractive market opportunity
• Strong industry and technological competence
• Ability to meet high demand through fleet expansion
• Sustainable business model
• Solid customers in all verticals

Agenda

Highlights Introduction to Argeo Operational update Commercial & Market update Technology Financials

Outlook

Outlook

Oil & Gas market strong and large tenders could convert to sizable contracts the short term

Offshore Wind activity steadily growing with special focus on EAME market

Deep-sea mineral (DSM) market is showing very positive dynamics with increased demand

Norwegian government passed an important milestone in the process of a potential "Opening of areas for mineral activities"

Total area considered for DSM activities is 592 500 sq.km, of this, roughly 320 000 sq.km (55%) is considered for opening

We are estimating a business potential exceeding 2 billion USD (survey data acquisition, sampling, and analysis) over the next 5-10 years

Thank you

Side 43