Electromagnetic Geoservices ASA

Investor Presentation • Nov 8, 2023

Q3 2023 RESULTS

Oslo, 9th November 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.

Q3 2023

Operational summary

• Atlantic Guardian warm-stacked for the entire quarter

Financial summary

• Revenues of USD 1.6 million
• EBITDA of USD 41 thousand
• Adjusted EBITDA of negative USD 0.7 million

Subsequent events

• EMGS entered in to its first acquisition contract related to renewable energy infrastructure. The contact has a value of up to approximately USD 2 million, however there is no minimum scope of work

Operations and Market

Market update

• Securing backlog, while being a top priority for EMGS, has proven to take significantly longer than expected
• Positive outlook on the Norwegian EM
  • Several companies have applied in the 2023 APA around with EM inn the work program
  • Expansion of the APA round area in the Western Barents Sea and an increased focus on gas exploration from the authorities
  • Ongoing discussions about potential 2024 NCS projects
• Significant interest in EM outside Norway, but the length of the sales cycle has increased relative to pre-Covid
• Increased interest in using EM for non-hydrocarbon applications including CCS, marine minerals, geothermal, geotechnical, MT for deep crustal and mantle imaging etc.

New EM applications and revenue streams

• Increasing interest in using EM for non-hydrocarbon applications
  • Carbon Capture and Storage considerable interest in understanding how CSEM can play a role in monitoring injected CO2. We are about to undertake the first paid feasibility study for CCS
  • Marine minerals exploration In addition to the upcoming concession round within the Norwegian Exclusive Economic Zone (EEZ) there are several licenses in the Atlantic and Indian Ocean where the use of EM is being discussed. The challenge is the limited size of these projects
  • Geothermal Onshore MT is being used to identify temperature anomalies in the subsurface that can be exploited as geothermal energy. We are in early discussions with serval institutions that are evaluating marine geothermal projects
  • Geotechnical and renewable energy infrastructure We recently announced our first project within the renewable energy infrastructure sphere
• New low-cost business models
  • Use of smaller local vessels equipped with EMGS equipment and crew
    • MT receivers
    • The deep towed streamer
    • Conventional source / ShelfXpress source

Renewable energy infrastructure acquisition contract

• Awarded a contract with a value of up to USD 2 million
• Acquisition of resistivity data based on the magnetotelluric (MT) geophysical method offshore Southeast Asia for an undisclosed customer
• EMGS will not be using the Atlantic Guardian, but will charter a smaller local vessel
• EMGS will mobilize approximately 25 receivers and a small field crew for the project

Financial position remains strong

• Financial position remains strong despite a disappointing Q3
• Available cash at end of Q3 was USD 11.5 million
• Convertible bond loan remains at approximately USD 19.5 million
• Book value of the multi-client library is USD 1.1 million
• Equity at USD 4.1 million

• Revenues • USD 1.6 million total revenue

• Vessel utilisation of 0%
  • Atlantic Guardian warm-stacked for the entire quarter
• EBITDA
  • USD 41 thousand
  • Adjusted EBITDA* of negative USD 0.7 million

Third quarter 2023 performance I Development in revenues and EBITDA

10

*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 Q3 23 of USD 2.3 million
  • USD 0.4 million higher than Q2 23

11

• 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
• 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 Q3 2023

• Net decrease in free cash of USD 1.9 million to USD 11.5 million
  • Negative Adjusted EBITDA of USD 0.7 million
  • Trade receivables increased by USD 0.7 million as compared to the previous quarter
  • Trade payables increased by USD 0.2 million
  • Vessel and office lease expense of USD 0.8 million
  • PP&E investment of USD 0.1 million

Q & A

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