First quarter 2020
Axxis Geo Solutions
Lee Parker, CEO and Nils Haugestad, CFO
27 May 2020
Disclaimer
- The information in this presentation has been prepared by Axxis Geo Solutions ASA ("AGS" or the "Company"). By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations and provisions:
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1.About AGS
2.Highlights
3.Financials
3
Axxis Geo Solutions in brief
- An ocean bottom node (OBN) seismic service company
- Multi-client and contract seismic
- Experienced management and organizational core
- Headquarter at Lysaker, Norway
- Listed on Oslo Axess (ticker AGS)
AxxisGeo Solutions' competitive edge in the OBS market
Asset light model Core competence & Operational excellence proprietary technology
Flexible and cost efficient asset light leasing model
Vessels
Nodes Crews
- Possible to adjust number of crews
- Flexibility proven in the North Sea
- Using crews with node handling experience
Cost base closely linked to utilization and activity level
Continued focus on existing field and reserves
- Appraisal
- Enhanced Oil recovery
- Locations with high ROCR
- Maximising production / minimizing costs
- Infrastructure led exploration, quick return on capital
- An attractive alternative to "high-end" towed streamer seismic
1.About AGS
2.Highlights
3.Financials
7
Q1 Highlights Full quarter operations
- In production of the OBN survey in the Middle East
- Completed the Brazil source operation campaign with Neptune Naiad
- Delivery of milestone Northern Utsira OBN project data in the North Sea
- Received LOI from Equinor for a North Sea contract in February, signed final agreement in May 2020
Neptune Naiad crew
1.About AGS 2.Highlights
3.Financials
9
AGS reporting going forward
Segment reporting (internal reporting)
- Gives a conventional representation of underlying operational performance and value creation
- Percentage of completion method for multi-client
- Presentations from AGS will mainly focus on segment reporting
- The investor community, including analyst, focus on segment reporting
IFRS reporting
- Due to IFRS15 revenue recognition, revenues related to multi-client projects are postponed until projects are ready to be delivered to customers
- No amortization until completion of the project including data processing
- Late sales from completed projects will not be affected
- IAS 34 require IFRS reporting in the quarterly interim reports
First quarter segment financial review
- Revenues mainly driven by the project in Egypt of USD 42.4 million and the Brazilian campaign of MUSD 2.5 million
- Cost of sales related to the project in Egypt and the Brazilian campaign
- EBITDA of USD 13.5 million
- EBIT of USD 11.5 million
First quarter Segment P&L
Financials segment overview
Sequential performance
- Segment revenue derives from both contract and multi-client activity
- High level of fluctuation quarter by quarter
Financing and segment financial position
- Amortization of Multi-client library of USD 0.5 million
- Investment in node handling system of USD 0.026 million
- Total current assets of USD 38 million:
- Account receivables of USD 10 million related to Middle East project and the Brazil campaign
- Accrued revenue of USD 16.5 million
- Production revenue Middle East USD 13.5 million, Processing revenue MCL USD 2, India revenue USD 1 million
- Other current asset of USD 1 million
- Inventories fuel and luboil of USD 1.5 million
- Cash and cash equivalents of USD 9 million
In USD million
Assets position - Segment reporting
Financing and segment financial position cont.
- Equity net of USD 12 million
- Non-current liabilities zero as of March
- Interest bearing debt reclassed to short-term debt due to not fulfilled covenants to Eksportkreditt
- Total liabilities of USD 71 million:
- Account payable of USD 48 million
- Interest bearing debt of USD 2 million
- Other current liabilities of USD 21 million
- Accruals and deferrals on project cost and taxes of USD 15 million
- TGS credit Utsira of USD 6.6 million
In USD million
Equity and liabilities - Segment reporting
Restructuring
- Company is continuing discussions with key creditors
- Overall terms mutually agreed
- Plan will significantly strengthen working capital and improve liquidity
- Discussion expected to be completed shortly
16
1.About AGS 2.Highlights 3.Financials
Ongoing operations Egypt, Gulf of Suez Q1-Q2 project
- The survey commenced early January after testing completed
- Requires modern OBN imaging and processing techniques to unlock further hydrocarbon potential
- The area is well known to AGS management and is expected to yield future opportunities
- Supporting customers as a one-stop-shop partner • Important commercial milestone in AGS history, significantly improving backlog visibility
- Project phase one competed in April, vessels mobilised for North Sea project scheduled for late Q2
Backlog and outlook
~ USD 30 million backlog as of Q2
and >USD 500 million tenders / pipeline 2020 / 2021
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