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Capital Markets Day – TGS

TGS · May 23, 2013 · 177 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. Capital Markets Day – TGS – slide 1
    London, United Kingdom 23 May 2013 SLIDE 1 WWW.TGS.COM
  2. Capital Markets Day – TGS – slide 2
    Fire Instructions IF YOU DISCOVER A FIRE 1. Immediately operate the nearest fire alarm call point 2. Try to put out the fire if possible with the appliances provided but without taking personal risks ON HEARING THE FIRE ALARM 1. The…
  3. Capital Markets Day – TGS – slide 3
    Forward-Looking Statements All statements in this presentation other than statements of historical fact, are forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions that are difficult to…
  4. Capital Markets Day – TGS – slide 4
    Agenda 14:00 The Leading Global Provider of Quality Geoscience Data Robert Hobbs, CEO 14:25 Performing Through The Cycles Kristian Johansen, CFO 14:45 Q&A 15:00 A Global Multi-client Business Stein Ove Isaksen, SVP Eastern…
  5. Capital Markets Day – TGS – slide 5
    The Leading Global Provider of Quality Geoscience Data Robert Hobbs, CEO 5 SLIDE 5 WWW.TGS.COM
  6. Capital Markets Day – TGS – slide 6
    Leading Global Provider of Quality Geoscience Data Leading provider of multi-client seismic data and related geoscientific products to the oil and gas industry TGS Main Offices Main offices: Houston and Oslo Regional offices:…
  7. Capital Markets Day – TGS – slide 7
    Company Milestones SLIDE 7 WWW.TGS.COM
  8. Capital Markets Day – TGS – slide 8
    Multi-client Data Model Explained Geophysical services business Answer customer need through tendering (client- Client funds project Client owns data driven) Multi-client data business Identify project Secure TGS invests in…
  9. Capital Markets Day – TGS – slide 9
    Look Back 2010 Strategic Plan 2010 Strategic Plan Results: Revenue Growth (MUSD) Geographic expansion US Onshore 1,000 New products 800 M&A Build organization 600 Leverage existing library 400 200 0 2010 2011 2012 2013…
  10. Capital Markets Day – TGS – slide 10
    2013 Status versus 2010 Strategic Plan 2010 Strategic Plan Results: Revenue Growth (MUSD) Geographic expansion 2013 guidance: 970-1050 MUSD US Onshore 1,000 New products 800 M&A Build organization 600 Leverage existing library…
  11. Capital Markets Day – TGS – slide 11
    Highlights from TGS 2013 2015 Strategic Plan Flexible dividend policy which allows increased investments in combination with shareholder Capital allocation friendly capital allocation policy Take advantage of strong balance sheet to…
  12. Capital Markets Day – TGS – slide 12
    Positive Market Drivers in Oil Services World Liquid Fuel Supply Oil and gas reserves continue to decline More oil produced from existing reserves than we are discovering Political instability and closed markets reduces…
  13. Capital Markets Day – TGS – slide 13
    E&P Spending Increase of 7% Expected For 2013 Barclays expect 2013 global E&P spending to surpass 640 BUSD More than 300 oil and gas companies worldwide participated in the Barclays Capital survey about their spending intentions…
  14. Capital Markets Day – TGS – slide 14
    Seismic Market Facilitating Further Profitable Growth Seismic spending steadily increasing Multi-client outgrowing contract 18,000 100 % 100 % 16,000 90 % 14,000 80 % 80 % 70 % 12,000 60 % 60 % 10,000 50 %…
  15. Capital Markets Day – TGS – slide 15
    Business Update 15 SLIDE 15 WWW.TGS.COM
  16. Capital Markets Day – TGS – slide 16
    Multi-client Seismic EUR Application of modern seismic technology aids recent discoveries in mature North Sea market Developing a dominant position in Barents Sea Potential uplifts expected following 22nd Norwegian License round…
  17. Capital Markets Day – TGS – slide 17
    TGS Announces Strategic Partnerships Three year agreement with BGP to jointly acquire, process and market 2D and 3D multi-client seismic data offshore Madagascar and East Africa Leverage respective strengths to build a strong…
  18. Capital Markets Day – TGS – slide 18
    TGS Announces New Multi-client Surveys Francisco 3D 4,662 km2 multi-client 3D survey in the Atwater Valley area of the central Gulf of Mexico First 3D survey in this frontier area of the Gulf of Mexico Broadband processing using…
  19. Capital Markets Day – TGS – slide 19
    Imaging Clari-FiTM Processing methodology that increases bandwidth and improves imaging May be applied to conventionally acquired pre- or post-stack data Addresses ghost and filtering effects Gulf of Mexico Hernando 11,400 km2 of…
  20. Capital Markets Day – TGS – slide 20
    Geological Products and Services TGS owns and manages the largest well log database in North America Strong synergies with multi-client seismic data business SLIDE 20 WWW.TGS.COM
  21. Capital Markets Day – TGS – slide 21
    Reservoir Solutions Value proposition for permanent reservoir monitoring remains strong High level of interest from customers Expect to see more integrated contracts (provision of data, not just equipment) SLIDE 21…
  22. Capital Markets Day – TGS – slide 22
    TGS Competitive Advantage Asset light business model Flexibility Investment decisions not driven by vessel utilization Quality Global Financial position, balance sheet Data library People and culture Geographic knowledge…
  23. Capital Markets Day – TGS – slide 23
    Performing Through the Cycles Kristian Johansen, CFO 23 SLIDE 23 WWW.TGS.COM
  24. Capital Markets Day – TGS – slide 24
    TGS Performs in all Cycles EBIT margin vs. Seismic peers Return on Capital Employed 80% 80% 20 % 60% 70% 40% 60% 20% 50% 0% 40% -20% 30% -40% -60% 20% -80% 10% -100% 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007…
  25. Capital Markets Day – TGS – slide 25
    Multi-client Model Yields Highest Returns at the Peak EBIT margin vs. vessel rates Demand for data drives TGS 60% 300 performance 50% 250 40% 200 30% 150 TGS best at top of the cycles, 20% 100 but multi-client model also…
  26. Capital Markets Day – TGS – slide 26
    Solid Sales to Investment Ratios and High Volume Growth 3.5 M400 MC Sales/MC Annual Investment 3.0 M350 TGS average multi-client projects 2.5 M300 return 2-2.5 times cost M250 2.0 M200 1.5 M150 Significant investment growth…
  27. Capital Markets Day – TGS – slide 27
    Flexible Cost Base With High Operational Gearing 2012 Breakdown Cost components Cost of goods sold: Direct cost related to proprietary contract projects Cost of Multi-client library amortization: stock options Fluctuates…
  28. Capital Markets Day – TGS – slide 28
    Diversified Portfolio With Different Characteristics Characteristics TGS multi-client project portfolio Return targets + 1.7X 2.0X 2.5X + 2.5X Prefunding 70 120% 40 60% 20 40% requirements Awarded acreage Mainly open…
  29. Capital Markets Day – TGS – slide 29
    10 Year Cash Flow Development 3% 250 1200 20 % 20 % 1055 315 197 1000 200 175 154 800 410 150 141 600 84 91 100 400 155 73 72 58 245 52 200 50 30 0 0 Cumulative M&A Dividend* Buy backs Share Increased 2004 2005 2006 2007…
  30. Capital Markets Day – TGS – slide 30
    Maintaining Dividend Capacity 160 149* 4.2% Dividend yield of 3.5% to 4.0% during 140 last 4 years 4.0% 120 103 93 3.8% 100 TGS holds approximately 1.2 million 80 65 3.6% treasury shares 60 1% of shares 3.4% 40 AGM has…
  31. Capital Markets Day – TGS – slide 31
    Strong Balance Sheet Backing TGS Strategy Other Goodwill Current liabilities 128 324 86 Non-current Cash balance per Q1 2013 Cash 412 127 liabilities represents 412 MUSD Proposed dividend of 149 MUSD in Receivables June…
  32. Capital Markets Day – TGS – slide 32
    How a Typical Multi-client Investment Works Example x2.5 ROI Project with 50% pre-funding Accounting standards recommend to Year 0 1 2 3 4 match revenues and costs in time Investment 50 - - - - Pre-funding 25 - - - - TGS capitalizes…
  33. Capital Markets Day – TGS – slide 33
    Investments per Vintage Q1 2013 3% 20700 % 100% 679 600 500 61% 400 299 300 270 200 153 60% 132 37% 100 20% 40% 4% 18% 23% 0% 0 2009 2010 2011 2012 WIP Original investments Maximum allowed NBV…
  34. Capital Markets Day – TGS – slide 34
    Actual Amortization vs. Minimum Amortization Policy (USD) 20300 % 3% 268 250 200 150 100 61 50 26 6 0 2009 2010 2011 2012 WIP -6 -50 Actual amortization per vintage vs minimum amortization policy - Q1…
  35. Capital Markets Day – TGS – slide 35
    Demonstrating Financial Health of Multi-client Library 70% Net book value of multi-client library 60% Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 366 453 471 538 707 50% 59% 40% 64% 43% 61% 61 % 30% 59% 57% 53% 32% 44% 42%…
  36. Capital Markets Day – TGS – slide 36
    Performance Through the Cycle Success Formula Why does TGS perform better than peers in down-cycle Low overheads with high percentage of variable pay Spending flexibility Countercyclical investments Maintain quality Clients still…
  37. Capital Markets Day – TGS – slide 37
    Shareholder Distribution and Trading Statistics TGS Shareholder Distribution OSE Trading Statistics Germany Other China 3500 2.5% 2% 12% 3% 2.2% 3000 Canada 2.0% 3% 2500 Norway 1.7% Luxembourg 1.5% 1.5% 29 % 2000 4%…
  38. Capital Markets Day – TGS – slide 38
    Q&A 38 SLIDE 38 WWW.TGS.COM
  39. Capital Markets Day – TGS – slide 39
    A Global Multi-client Business Stein Ove Isaksen, SVP Eastern Hemisphere 39 SLIDE 39 WWW.TGS.COM
  40. Capital Markets Day – TGS – slide 40
    TGS is a Global Business Geographical revenue split 2002 2012 7% 9% 16 % 39 % NSA NSA 26 % EUR EUR AMEAP AMEAP OTHER OTHER 77 % 26 % SLIDE 40 WWW.TGS.COM
  41. Capital Markets Day – TGS – slide 41
    TGS is a Global Business Geographical revenue split 2002 2012 9% 23 % 39 % Western Hemisphere Western Hemisphere Eastern Hemisphere Eastern Hemisphere Other Other 77 % 52 % Revenue diversity development 1,000…
  42. Capital Markets Day – TGS – slide 42
    A Global Data Library SLIDE 42 WWW.TGS.COM
  43. Capital Markets Day – TGS – slide 43
    A Global Data Library SLIDE 43 WWW.TGS.COM
  44. Capital Markets Day – TGS – slide 44
    A Global Data Library SLIDE 44 WWW.TGS.COM
  45. Capital Markets Day – TGS – slide 45
    A Global Data Library SLIDE 45 WWW.TGS.COM
  46. Capital Markets Day – TGS – slide 46
    A Global Data Library SLIDE 46 WWW.TGS.COM
  47. Capital Markets Day – TGS – slide 47
    TGS Approach to Developing a Basin Risk Grav/Mag Well data Time SLIDE 47 WWW.TGS.COM
  48. Capital Markets Day – TGS – slide 48
    TGS Approach to Developing a Basin Risk Grav/Mag Well data G&G Time SLIDE 48 WWW.TGS.COM
  49. Capital Markets Day – TGS – slide 49
    TGS Approach to Developing a Basin Risk Grav/Mag Well data G&G 2D Time SLIDE 49 WWW.TGS.COM
  50. Capital Markets Day – TGS – slide 50
    TGS Approach to Developing a Basin Risk Grav/Mag Well data G&G 2D Regional Interpret Time SLIDE 50 WWW.TGS.COM
  51. Capital Markets Day – TGS – slide 51
    TGS Approach to Developing a Basin Risk Grav/Mag Well data G&G 2D Regional Interpret Further G&G Time SLIDE 51 WWW.TGS.COM
  52. Capital Markets Day – TGS – slide 52
    TGS Approach to Developing a Basin Risk Grav/Mag Well data G&G 2D Regional Interpret Further G&G 3D Time SLIDE 52 WWW.TGS.COM
  53. Capital Markets Day – TGS – slide 53
    TGS Approach to Developing a Basin Risk Grav/Mag Well data G&G 2D Regional Interpret Further G&G 3D Next generation technology Time SLIDE 53 WWW.TGS.COM
  54. Capital Markets Day – TGS – slide 54
    Case Study Barents Sea Proven petroleum system, available acreage and regular concession rounds Statoil Skrugard & Havis discoveries: 400 - 600 million boe Total Norvarg gas field 200 million boe Barents Sea delimitation deal…
  55. Capital Markets Day – TGS – slide 55
    Long-term Strategy Put to Life Barents Sea 2D 2006 SLIDE 55 WWW.TGS.COM
  56. Capital Markets Day – TGS – slide 56
    Long-term Strategy Put to Life Barents Sea 2D 2006 2007 SLIDE 56 WWW.TGS.COM
  57. Capital Markets Day – TGS – slide 57
    Long-term Strategy Put to Life Barents Sea 2D 2006 2007 2008 SLIDE 57 WWW.TGS.COM
  58. Capital Markets Day – TGS – slide 58
    Long-term Strategy Put to Life Barents Sea 2D 2006 2007 2008 2009 SLIDE 58 WWW.TGS.COM
  59. Capital Markets Day – TGS – slide 59
    Long-term Strategy Put to Life Barents Sea 2D 2006 2007 2008 2009 2010 SLIDE 59 WWW.TGS.COM
  60. Capital Markets Day – TGS – slide 60
    Long-term Strategy Put to Life Barents Sea 2D 2006 2007 2008 2009 2010 2011 SLIDE 60 WWW.TGS.COM
  61. Capital Markets Day – TGS – slide 61
    Long-term Strategy Put to Life Barents Sea 2D 2006 2007 2008 2009 2010 2011 2012 SLIDE 61 WWW.TGS.COM
  62. Capital Markets Day – TGS – slide 62
    Long-term Strategy Put to Life Barents Sea 2D 2006 2007 2008 2009 2010 2011 2012 AMR_NBR SLIDE 62 WWW.TGS.COM
  63. Capital Markets Day – TGS – slide 63
    Long-term Strategy Put to Life Barents Sea 3D Pre 2005 SLIDE 63 WWW.TGS.COM
  64. Capital Markets Day – TGS – slide 64
    Long-term Strategy Put to Life Barents Sea 3D Pre 2005 Pre 2010 SLIDE 64 WWW.TGS.COM
  65. Capital Markets Day – TGS – slide 65
    Long-term Strategy Put to Life Barents Sea 3D Pre 2005 Pre 2010 Pre 2012 SLIDE 65 WWW.TGS.COM
  66. Capital Markets Day – TGS – slide 66
    Long-term Strategy Put to Life Barents Sea 3D Pre 2005 Pre 2010 Pre 2012 TGS 2012 SLIDE 66 WWW.TGS.COM
  67. Capital Markets Day – TGS – slide 67
    Long-term Strategy Put to Life Barents Sea 3D Pre 2005 Pre 2010 Pre 2012 TGS 2012 TGS 2013 SLIDE 67 WWW.TGS.COM
  68. Capital Markets Day – TGS – slide 68
    NBR09 Stappen High Broadband Processing (AMR) SLIDE 68 WWW.TGS.COM
  69. Capital Markets Day – TGS – slide 69
    NBR09 Stappen High Broadband Processing (AMR) SLIDE 69 WWW.TGS.COM
  70. Capital Markets Day – TGS – slide 70
    Barents Sea Cumulative Financial Performance M350 3.5 Investment Timeline: 3.0 M300 2001 Original 2D 2001 Reprocessed 2D M250 2003 Original 3D 2.5 Cumulative Sales to Cost Ratio 2005 Reprocessed 2D 2008 Reprocessed…
  71. Capital Markets Day – TGS – slide 71
    Case Study Carnarvon Basin LNG demand drives exploration in Northwest Australia Long term LNG contracts with Asia, mainly Japan and increasingly to China Large LNG projects in production, under construction and proposed TGS in…
  72. Capital Markets Day – TGS – slide 72
    Carnarvon Basin Reserves 94.4 Tcf SLIDE 72 WWW.TGS.COM
  73. Capital Markets Day – TGS – slide 73
    Long-term Strategy put to life Carnarvon Basin Flinders multi-client 3D 2001 SLIDE 73 WWW.TGS.COM
  74. Capital Markets Day – TGS – slide 74
    Long-term Strategy put to life Carnarvon Basin Flinders multi-client 3D 2001 Mary Rose multi-client 3D 2011 SLIDE 74 WWW.TGS.COM
  75. Capital Markets Day – TGS – slide 75
    Long-term Strategy put to life Carnarvon Basin Flinders multi-client 3D 2001 Mary Rose multi-client 3D 2011 Mary Rose Northeast Extension multi-client 3D 2011 SLIDE 75 WWW.TGS.COM
  76. Capital Markets Day – TGS – slide 76
    Long-term Strategy put to life Carnarvon Basin Flinders multi-client 3D 2001 Mary Rose multi-client 3D 2011 Mary Rose Northeast Extension multi-client 3D 2011 Gnaraloo multi-client 3D 2012 SLIDE 76 WWW.TGS.COM
  77. Capital Markets Day – TGS – slide 77
    Long-term Strategy put to life Carnarvon Basin Flinders multi-client 3D 2001 Mary Rose multi-client 3D 2011 Mary Rose Northeast Extension multi-client 3D 2011 Gnaraloo multi-client 3D 2012 Cazadores reprocessing 2012…
  78. Capital Markets Day – TGS – slide 78
    Long-term Strategy put to life Carnarvon Basin Flinders multi-client 3D 2001 Mary Rose multi-client 3D 2011 Mary Rose Northeast Extension multi-client 3D 2011 Gnaraloo multi-client 3D 2012 Cazadores reprocessing 2012…
  79. Capital Markets Day – TGS – slide 79
    Long-term Strategy put to life Carnarvon Basin Flinders multi-client 3D 2001 Mary Rose multi-client 3D 2011 Mary Rose Northeast Extension multi-client 3D 2011 Gnaraloo multi-client 3D 2012 Cazadores reprocessing 2012…
  80. Capital Markets Day – TGS – slide 80
    Fugro 2D Brokerage Offshore Australia SLIDE 80 WWW.TGS.COM
  81. Capital Markets Day – TGS – slide 81
    Carnarvon Basin Financial Performance TGS has treated the Carnarvon basin as a frontier area with high pre-funding Sales performance from recent projects are meeting expectations Further opportunities to grow library drawing on 2D…
  82. Capital Markets Day – TGS – slide 82
    Rejuvenate Mature Basins In recent years, drilling success rate has improved dramatically Record number of acreage awards in the 28th license round Development of recent discoveries will enhance West of Shetland infrastructure…
  83. Capital Markets Day – TGS – slide 83
    Rejuvenate Mature Basins 2003 SLIDE 83 WWW.TGS.COM
  84. Capital Markets Day – TGS – slide 84
    Rejuvenate Mature Basins 2003 2004 SLIDE 84 WWW.TGS.COM
  85. Capital Markets Day – TGS – slide 85
    Rejuvenate Mature Basins 2003 2004 2005 SLIDE 85 WWW.TGS.COM
  86. Capital Markets Day – TGS – slide 86
    Rejuvenate Mature Basins 2003 2004 2005 2006 SLIDE 86 WWW.TGS.COM
  87. Capital Markets Day – TGS – slide 87
    Rejuvenate Mature Basins 2003 2004 2005 2006 2007 SLIDE 87 WWW.TGS.COM
  88. Capital Markets Day – TGS – slide 88
    Rejuvenate Mature Basins 2003 2004 2005 2006 2007 2008 SLIDE 88 WWW.TGS.COM
  89. Capital Markets Day – TGS – slide 89
    Rejuvenate Mature Basins 2003 2004 2005 2006 2007 2008 2009 SLIDE 89 WWW.TGS.COM
  90. Capital Markets Day – TGS – slide 90
    Rejuvenate Mature Basins 2003 2004 2005 2006 2007 2008 2009 2010 SLIDE 90 WWW.TGS.COM
  91. Capital Markets Day – TGS – slide 91
    Rejuvenate Mature Basins 2003 2004 2005 2006 2007 2008 2009 2010 2011 SLIDE 91 WWW.TGS.COM
  92. Capital Markets Day – TGS – slide 92
    Rejuvenate Mature Basins 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 SLIDE 92 WWW.TGS.COM
  93. Capital Markets Day – TGS – slide 93
    Rejuvenate Mature Basins 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 AMR_NBR SLIDE 93 WWW.TGS.COM
  94. Capital Markets Day – TGS – slide 94
    Seismic Resolution vs. Well Log Resolution 10m
  95. Capital Markets Day – TGS – slide 95
    A Global Business Our customers are global; TGS database has unmatched global coverage TGS has a unique approach to project development Start with a regional approach (mainly 2D) A mature basin today, can be a frontier basin…
  96. Capital Markets Day – TGS – slide 96
    Break 96 SLIDE 96 WWW.TGS.COM
  97. Capital Markets Day – TGS – slide 97
    Delivering Quality to Customers Rod Starr, SVP Western Hemisphere 97 SLIDE 97 WWW.TGS.COM
  98. Capital Markets Day – TGS – slide 98
    Investments Quality People Data SLIDE 98 WWW.TGS.COM
  99. Capital Markets Day – TGS – slide 99
    Data Investment Quality Considerations Challenge Opportunity Availability of existing data Customer activity Exploration success E&P maturity Environmental challenges Geoscience Technology Geopolitics Industry pre-funding SLIDE 99…
  100. Capital Markets Day – TGS – slide 100
    Data Investment Strategies Intensify Expand New Entry Technology Selection SLIDE 100 WWW.TGS.COM

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