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Q1 2014 RESULTS – Petroleum Geo Services (PGS)

Petroleum Geo Services (PGS) · May 9, 2014 · 35 slides

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Slides

  1. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 1
    Unaudited First Quarter 2014 Results Oslo, May 9, 2014 Picture: Edgard Escalona
  2. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 2
    Cautionary Statement This presentation contains forward looking information Forward looking information is based on management assumptions and analyses Actual experience may differ, and those differences may be material Forward…
  3. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 3
    Soft Quarter as Guided Strong Cash Flow Q1 2014 was negatively impacted by: High MultiClient allocation combined with a lower than average MultiClient pre-funding level Seasonally lower pricing in the marine contract market High…
  4. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 4
    Financial Summary Revenues EBITDA* 246 405 250 388 395 400 382 222 216 365 360 366 360 210 202 201 200 300 293 162 USD million 146 150 USD million 139 200 100 100 50 - - EBIT** Cash Flow from…
  5. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 5
    Strong Order Book Focus on Price Optimization 800 700 Order book of USD 610 600 million by the end of Q1 2014 500 USD million Vessel booking* 400 100% booked for Q2 2014 300 85% booked for Q3 2014 30% booked for Q4…
  6. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 6
    2008 2015 First Phase of the Industrial Approach: Performance Through the Cycle - Getting it Right 3D fleet renewal and growth Average vessel age reduced from 16.2 to 9.2 years Average streamers per vessel increased from 8.5 to 12.9…
  7. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 7
    2016 and Beyond: Becoming Fully Industrialized Financial focus on profit, free cash flow and ROCE - not vessel market share growth Leveraging free cash flow for dividend growth a priority Leveraging GeoStreamer equipped fleet and…
  8. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 8
    Significant Free Cash Flow Potential 1000 Cash flow from operations covers ECF facility and net MultiClient investments, change in cash maintenance CAPEX, interest & NB CAPEX financing/debt service, dividends and a significant…
  9. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 9
    Financials Unaudited First Quarter 2014 Results
  10. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 10
    Condensed Consolidated Statement of Operations Summary Q1 Q1 Full year USD million (except per share data) 2014 2013 % change 2013 Revenues 292.5 394.8 -26 % 1501.6 EBITDA* 138.5 202.3 -32 % 828.9 Operating profit (EBIT) ex…
  11. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 11
    Condensed Consolidated Statement of Operations Summary Q1 Q1 Full year USD million (except per share data) 2014 2013 % change 2013 Revenues 292.5 394.8 -26 % 1501.6 EBITDA* 138.5 202.3 -32 % 828.9 Operating profit (EBIT) ex…
  12. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 12
    Q1 2014 Highlights Contract revenues MultiClient revenues 250.0 80 % 250 % 207.3 70 % 85.9 192.8 200 200.0 200 % 174.9 156.3 60 % 163.8 65.7 155.7 USD million 50 % 150 99.2 USD million 150.0 63.0 150 % 128.5 121.7…
  13. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 13
    MultiClient Revenues per Region Pre-funding and Late Sales Revenues Combined 250 Pre-funding revenues were 200 highest in Europe, South America and Africa 150 USD million Strong late sales in Europe 100 and South…
  14. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 14
    Key Operational Numbers 2014 2013 USD million Q1 Q4 Q3 Q2 Q1 Contract revenues 116.0 121.7 155.7 192.8 207.3 MultiClient Pre-funding 74.2 94.3 108.4 65.2 92.6 MultiClient Late sales 64.8 99.2 63.0 90.2 58.9 Imaging 28.0 32.6 34.3…
  15. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 15
    Vessel Utilization Seismic Streamer 3D Fleet Activity in Streamer Months 100 % Approximately 35% of 90 % active 3D vessel capacity 80 % allocated to MultiClient for 70 % the full year 2014 60 % Approximately 40% of 50 % active…
  16. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 16
    Group Cost* Development 300 Cost focus delivers results 272 268 271 270 270 265 252 250 240 241 Flat cost development from 2012 levels despite Ramform Titan in full operation 200 Limited cost impact of Ramform USD…
  17. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 17
    Consolidated Statements of Cash Flows Summary Q1 Q1 Full year USD million 2014 2013 2013 Cash provided by operating activities 182.1 102.7 775.3 Investment in MultiClient library (116.2) (72.9) (373.0) Capital expenditures (144.2)…
  18. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 18
    Strong Balance Sheet Position - Key Numbers March 31 March 31 Full year USD million 2014 2013 2013 Total assets 3 562.0 3 301.0 3 544.3 MultiClient Library 666.3 410.5 576.9 Shareholders' equity 2 069.3 1 964.9 2 065.6 Cash and…
  19. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 19
    Operational Update and Market Comments Unaudited First Quarter 2014 Results
  20. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 20
    Streamer Operations May 2014 Ramform Explorer (Barents Sea) Ramform Atlas Ramform Sovereign Atlantic Explorer Ramform Challenger (North Sea) (yard in Germany before steaming to North Sea) Ramform Vanguard (Yard in Cadiz…
  21. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 21
    Bidding Activity 3 500 Decline in Active Tenders and 3 000 Sales Leads is primarily a seasonal effect post North 2 500 Sea awards Recent uptick gives more USD million 2 000 confidence in decent bid 1 500 volumes for…
  22. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 22
    Global Supply and Demand Trends 600 From 2006 to end 2012 demand for Total 3D volume in '000 sq.km. 500 seismic grew by approximately 400 120% measured in sq.km. 300 Annual average growth rate of 12% 200 Growth in sq.km.…
  23. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 23
    Vessel Decommissioning Limits Capacity Growth Relative cash cost efficiency per streamer per day PGS vessels PGS planned decommissioning Competitors vessels Recently decommissioned or expected to be decommissioned during 2014 and…
  24. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 24
    Good MultiClient Sales Performance from All Vintages 1000 900 Strong sales progress for all 800 vintages 700 Moderate net book values 600 (NBV) for surveys completed USD Millions 500 2009-2013 400 Amortization is…
  25. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 25
    The GeoStreamer Technology Platform: Much More than Broadband Enhanced A clearer image illumination and for reduced sub- clearer earth surface risk model GeoStreamer with Reliable GeoStreamer Full Waveform GeoSource…
  26. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 26
    PGS Strategic Ambition To Care For our employees For the environment and society at large For our customers success To Deliver Productivity Leadership Ramform platform + GeoStreamer Reducing project turnaround time To Develop…
  27. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 27
    Near Term Outlook Sustained high oil price Deep water attractive for E&Ps Some opportunistic seismic spending due to declining rig rates impacts demand positively Low single digit demand growth for 2014 Average 2014 pricing…
  28. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 28
    2014 Guidance Reiterated EBITDA in the range of USD 900-950 million MultiClient cash investments of approximately USD 350 million Pre-funding level of approximately 100% Capital expenditures of approximately USD 450 million…
  29. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 29
    In Conclusion: Well Positioned for the Future Differentiating technology Cost effective operations Improved productivity Solid financial position Significant free cash flow potential Returning cash to shareholders…
  30. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 30
    Thank you Questions
  31. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 31
    Appendix: Continuously Ahead of Competition 1992 - 1996 1998 - 1999 2007 - 2009 2012 - 2014 Competition 4 6 streamers 6 8 streamers 8 - 12 streamers 10 - 20 streamers PGS 8 - 12 streamers 12 - 18 streamers 12 22 streamers 14…
  32. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 32
    The PGS Fleet: Delivers Productivity Leadership Ramforms Other vessels Ramform fleet is Titan-class improving further Ramform Titan Ramform Atlas 2 Titan Class for 2015 delivery PGS Apollo with 4 new Titan- class vessels…
  33. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 33
    Ramform Titan-class Delivers Attractive Returns PGS has historically strong returns on capital employed over the cycle Targeting average returns of 5% in excess of weighted average cost of capital (WACC) over the cycle WACC…
  34. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 34
    Main Yard Stays Next 6 Months Vessel When Expected Type of Yard Stay Duration Ramform April 2014 Approximately Renewal class Vanguard 23 days Ramform April 2014 Approximately Intermediate class Challenger 10 days Ramform…
  35. Q1 2014 RESULTS – Petroleum Geo Services (PGS) – slide 35
    Attractive Debt Structure Long term Credit Lines and Interest Nominal Total Financial Covenants Bearing Debt Amount as Credit Line of end March, 2014 USD 400.0 million Term Loan (TLB), Libor USD 400.0 None, but incurrence test:…

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