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BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp

Ion Geophysical Corp · Nov 14, 2011 · 37 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 1
    ION Geophysical Corporate Update Bank of America Merrill Lynch 2011 Global Energy Conference Presented by Brian Hanson, President, COO November 14-16, 2011
  2. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 2
    Todays Discussion y Who We Are and What We Do y Areas of Expertise & Recent Examples y Current Business Issues y Summary y Appendix: Financial Information 2
  3. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 3
    Who We Are and What We Do 3
  4. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 4
    ION at a Glance y Technology company, driven to develop and apply proven, innovative technologies and services to help our clients find and produce hydrocarbons as safely and efficiently as possible y Founded in 1968 as Input/Output…
  5. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 5
    Global Footprint Headquarters Data processing centers Sales and service centers BasinSPANS 5
  6. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 6
    Seismic vs. E&P vs. IONs Served Market A 16-19 Billion Annual (Revenue) Industry, A 5-6.5 Billion Annual Market 490 B 16-19 B Exploration 16% 12% Data Library Sales…
  7. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 7
    Global Market Outlook Energy Markets y General Lingering effects of oil spill slower to rebound than expected Geopolitical tensions and regulatory uncertainty U.S. economic recovery slower than expected Developing countries led by…
  8. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 8
    Global Market Outlook Geophysical Sector y Predicted increased E&P spending realized y 2011 healing period for seismic as exploration activity resumes y Marine Anticipated incremental higher capacity seismic vessels working,…
  9. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 9
    Revenue Distribution by Product/Service Line TTM Ending 30-September 2011 100% = 453.4 Million Software YOY Growth 4% New Venture 38.4M Solutions YOY Growth 19% 86.8M YOY Growth 32% 286.7M Data Processing YOY Decline…
  10. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 10
    ION Strategy y Technology company bring the whole of ION to bear to solve the toughest E&P challenges y History of innovation cableless acquisition technology and digital sensors, streamer steering technology, command and control…
  11. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 11
    ION Strategy Participation by Business Unit Planning Acquisition Processing Interpretation Concept Systems Survey Design Software and Services Marine Acquisition Technologies ION (49%) Joint Venture with BGP (51%) Land…
  12. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 12
    ION Strategy Bringing the Whole of ION to Solve Industry Problems Planning Acquisition Processing Interpretation ARCTIC EXPLORATION Full-scope Project Management Survey planning and design, acquisition, and data processing and…
  13. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 13
    Areas of Expertise & Recent Examples 13
  14. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 14
    Areas of Expertise Challenging Environments Arctic, Shallow/Obstructed Water, Transition Zone and Desert Complex Geologies Subsalt, Sub Basalt, Thrust Belt and Carbonates Unconventional Reservoirs Shales, Tight Gas, and Oil…
  15. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 15
    Unconventional Reservoirs Macro Challenges y Natural gas prices predicted to remain depressed due to an expanded shale gas resource base y Short-term shift in activity from gas to oil shales, but shale gas predicted to continue…
  16. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 16
    Unconventional Reservoirs ResSCANS y The ResSCANS Difference Rely on upfront geological, petrophysical, and rock physics analysis Establish what seismic attributes tie the geology and rock physics for a given shale play and…
  17. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 17
    Unconventional Reservoirs Cost-Saving Completion Strategies in the Marcellus y Challenges SHALE PLAY ECONOMICS Better understand the variability in rock (Figures provided by client) properties OPERATING COSTS: Drilling: 4-8 million…
  18. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 18
    Current Business Issues 18
  19. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 19
    Data Processing - Total Revenue by Quarter Revenue (In Millions of USD) 30 28 M 28 M 25 23 M 21 M 21 M 20 15 10 5 - Q310 Q410 Q111 Q211 Q311 19
  20. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 20
    Current Business Issues New Ventures y Strong performance of new ventures due to portfolio of new ventures activity in shale plays and continued strength in marine programs Four new ResSCAN projects in flight y Record investment…
  21. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 21
    ION Capital Expenditures Relative to Revenue Average Per Year 06 - YTD 11 NV Revenue vs MCDL Investment 500 450 400 350 300 Millions 250 200 150 100 50 0 FY '06 FY '07 FY '08 FY'09 FY '10 YTD '11 Combined New…
  22. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 22
    ION Capital Expenditures Relative to Revenue Average Per Quarter 2006-2010 Qtr Pt Avg. NV Revenue vs Avg. MCDL Investment 90 80 70 60 Millions 50 40 30 20 10 0 AVG Q1 AVG Q2 AVG Q3 AVG Q4 AVG FY New Venture Revenue…
  23. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 23
    Current Business Issues INOVA y Strong vibrator sales y Continued BGP purchases totaling 50% of YTD INOVA sales y Effect of situation in Libya, Yemen and other Middle East/North Africa countries negative in the short term;…
  24. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 24
    Summary 24
  25. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 25
    Summary y Improved YTD 2011 results compared to 2010 y Sequentially improving recovery of data processing business y Anticipate data processing be at our near capacity by end of year y Strong performances of new ventures and data…
  26. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 26
  27. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 27
    Appendix: Financial Information y Selected Financial Highlights 27
  28. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 28
    Financial Overview Q3 2011 y ION delivers 0.06 of diluted EPS for the third quarter. y Revenues of 116 million for the third quarter with year-to-date revenues of 295 million compared to 286 million for the prior period. Excluding…
  29. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 29
    Financial Overview Trailing Twelve Month (TTM) Revenue Comparison Including Legacy Land Systems Excluding Legacy Land Systems 500 500 400 400 300 300 Millions Millions 200 200 100 100 - - 2010 2011 2010…
  30. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 30
    Solutions Segment Q3 2011 Financial Overview Revenue by Type Multi-client CapEx Investment 190 140 180 120 170 100 160 Millions 150 80 140 60 130 120 40 110 20 100 - Millions 90 80 2009 2010 2011 70 Actual…
  31. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 31
    Software Segment Q3 2011 Financial Overview Revenue by Type (GBP) % of Seismic Vessels with Orca 19 18 17 16 15 14 41% 13 12 59% 11 10 9 Millions 8 7 6 Orca-Permanent Other 5 4 Orca Vessel Conversion 3 2 1 -…
  32. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 32
    Systems Segment Q3 2011 Financial Overview Revenue by Type 100 90 80 70 Millions 60 50 40 30 20 10 - YTD 2010 YTD 2011 Towed Streamer Equipment OBC Other 32
  33. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 33
    Systems Segment Vessel Count & Streamer Length Segmented by Survey Type 140 9000 122 126 118 118 8000 120 7275 106 6542 7000 97 100 5910 83 5492 5348 6000 Vessel Count Kilometers 80 5000 4258 60 3625 4000 55 63 80…
  34. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 34
    Financial Overview Balance Sheet as of September 30, 2011 Capital Employed Financing 600 600 500 500 400 400 Millions Millions 300 147M 300 200 200 100 100 72M 99M 0 0 Cash & ST Investments Remaining Working…
  35. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 35
    Financial Overview Liquidity & LT Debt as of September 30, 2011 Liquidity of 172M LT Debt of 99M 3% 58% 42% 97% Undrawn Revolver Cash & ST Investments Term Loan Facility & Equipment Leases Revolver and Term A both…
  36. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 36
    Financial Overview Cash Flow Nine Months Ended September 30, SUMMARIZED CASH FLOW 2011 2010 Cash from operations 84,879 87,081 Working capital 1,242 (29,848) Multi-client investment (91,594) (58,866) PP&E Capital…
  37. BANK OF AMERICA MERRILL LYNCH 2011 GLOBAL ENERGY CONFERENCE – Ion Geophysical Corp – slide 37
    INOVA Geophysical Q3 2011 Financial Overview Q310 vs Q311 Forecasted Revenues 100 Estimated Q3 revenues of 25 to 29 million with operating loss of 8 to 10 million and net loss of 90 10 to 12 million* 80 YTD revenue increased…

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