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Barclays – Ion Geophysical Corp

Ion Geophysical Corp · Jun 30, 2010 · 60 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. Barclays – Ion Geophysical Corp – slide 1
    ION and the Seismic Sector Leveraged to Upcoming Exploration Cycle Barclays Presented by Brian Hanson, CFO June 2010
  2. Barclays – Ion Geophysical Corp – slide 2
    Forward-looking Statement Todays presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements as to expectations,…
  3. Barclays – Ion Geophysical Corp – slide 3
    An Overview of ION Business: Advanced geophysical hardware, software, imaging services, and data libraries across the seismic workflow for both Land and Marine. Mission: To solve the most challenging geophysical imaging problems…
  4. Barclays – Ion Geophysical Corp – slide 4
    Todays Discussion Seismic in Context The Seismic Method Where ION Competes [4]
  5. Barclays – Ion Geophysical Corp – slide 5
    Seismic Provides a Window into the Subsurface Provides Insights to Critical E&P Questions Are there any unusual sub-surface conditions that we may encounter while drilling the well Do potential structures exist to trap the oil…
  6. Barclays – Ion Geophysical Corp – slide 6
    Seismic Provides a Window into the Subsurface Analogous to Medical Ultra-Sound, Though With Key Differences 5,000,000 to 10,000 to 50,000,000 100,000 5,000 to 25,000 3 to 6 feet inches [6]
  7. Barclays – Ion Geophysical Corp – slide 7
    Seismic vs. Overall E&P Expenditures A 15-17 Billion Annual (Revenue) Industry 440 B 15-17 B Other 16% 12% Data Library Sales Exploration 20% Exploration…
  8. Barclays – Ion Geophysical Corp – slide 8
    The Players in Seismic Revenue Distribution (2009) ION vs. Other Major Players 100% = 15-17 Billion CGGVeritas WesternGeco PGS BGP TGS ION Others Source: Company annual reports, ION analysis [8]
  9. Barclays – Ion Geophysical Corp – slide 9
    The Players in Seismic Participation by Segment CGGVeritas Western Geco PGS BGP TGS ION Data Library Sales n/a Data Processing Proprietary INOVA INOVA Land Equipment Q-Land n/a (51%) n/a (49%) Divested FEB-2010…
  10. Barclays – Ion Geophysical Corp – slide 10
    Location of Discoveries 100 MMBOE A Proxy for Global E&P (and Seismic) Activity 2001 2005 2001 2005 Discoveries Discoveries 100 249 mmboe 250 499 mmboe 500 999 mmboe 1000 UP mmboe Source: CERA. [ 10 ]
  11. Barclays – Ion Geophysical Corp – slide 11
    Todays Discussion Seismic in Context The Seismic Method Where ION Competes [ 11 ]
  12. Barclays – Ion Geophysical Corp – slide 12
    The Physics of the Seismic Method Detecting Reflected Acoustic Energy Simplified [ 12 ]
  13. Barclays – Ion Geophysical Corp – slide 13
    The Tools of the Seismic Method 1: Acoustic Sources Onshore Offshore Dynamite Sleeve Guns (aka air guns) Vibroseis Vehicles [ 13 ]
  14. Barclays – Ion Geophysical Corp – slide 14
    The Tools of the Seismic Method 2: Acoustic Receivers Onshore Offshore Geophones Hydrophones VectorSeis multicomponent MEMS receiver VectorSeis multicomponent MEMS receiver [ 14 ]
  15. Barclays – Ion Geophysical Corp – slide 15
    The Tools of the Seismic Method 3: Recording Platforms (and Supporting Technologies) Onshore Cable-based To learn more: iongeo.com/Resources/Digital_Library/ Select ION Systems Toolkit under Multimedia [ 15 ]
  16. Barclays – Ion Geophysical Corp – slide 16
    The Tools of the Seismic Method 3: Recording Platforms (and Supporting Technologies) Onshore Cableless To learn more: iongeo.com/FireFly/ Watch the FireFly Returns video [ 16 ]
  17. Barclays – Ion Geophysical Corp – slide 17
    The Tools of the Seismic Method 3: Recording Platforms (and Supporting Technologies) Offshore Towed Streamer To learn more: iongeo.com/Resources/Digital_Library/ Select ION Systems Toolkit under Multimedia [ 17 ]
  18. Barclays – Ion Geophysical Corp – slide 18
    The Tools of the Seismic Method 3: Recording Platforms (and Supporting Technologies) Offshore Seabed (Ocean-bottom Cable) To learn more: iongeo.com/Resources/Digital_Library/ Select ION Systems Toolkit under Multimedia [ 18 ]
  19. Barclays – Ion Geophysical Corp – slide 19
    The Tools of the Seismic Method 4: Data Processing [ 19 ]
  20. Barclays – Ion Geophysical Corp – slide 20
    The Tools of the Seismic Method 5: Reservoir Interpretation P-wave image Full-wave image Channel Sands Difficult to Identify Channel Sands Clearly Visible Ps 50% Ps 90+% [ 20 ]
  21. Barclays – Ion Geophysical Corp – slide 21
    Todays Discussion Seismic in Context The Seismic Method Where ION Competes [ 21 ]
  22. Barclays – Ion Geophysical Corp – slide 22
    ION Product/Service Coverage Participation by Segment Equipment ______ ION Sources Receivers Recording Platforms Supporting Technologies Data Library Sales Data Processing Reservoir Solutions INOVA Vibroseis Sensor FireFly…
  23. Barclays – Ion Geophysical Corp – slide 23
    Revenue Distribution by Product/Service Line Twelve Months Ending 31-December 2009 100% = 420 Million Systems Data Processing New Ventures Data Libraries Note: Systems includes Sensor B.V., Marine Imaging Systems, Concept…
  24. Barclays – Ion Geophysical Corp – slide 24
    Whats Distinctive About ION Multiple Sources of Competitive Advantage 1. Complex imaging the data processing capabilities and E&P company relationships of our GX Technology (GXT) group that make us the go-to guys for imaging in the…
  25. Barclays – Ion Geophysical Corp – slide 25
    [ 25 ]
  26. Barclays – Ion Geophysical Corp – slide 26
    Appendix: Financial Information Selected Financial Highlights [ 26 ]
  27. Barclays – Ion Geophysical Corp – slide 27
    Net Revenues 2003-Q1 2010 ( Millions) 800 713 680 700 600 504 500 420 400 363 300 241 200 119 89 100 0 2003 2004 2005 2006 2007 2008 2009 Q1 2010 [ 27 ]
  28. Barclays – Ion Geophysical Corp – slide 28
    Revenues and Gross Margin Percent 2006-Q1 2010 Revenues ( Millions) Gross Margin % 750 713 40 700 680 650 600 35 550 504 30.6 31.5 500 30.6 450 420 30 28.5 400 350 25.2 300 25 250 200 150 20 89 100 2006 2007 2008 2009 Q1 2010 50…
  29. Barclays – Ion Geophysical Corp – slide 29
    Segment Revenues 2006-Q1 2010 ( Millions) Land Imaging Systems Marine Imaging Systems 350 325 200 178 183 300 250 150 128 206 200 200 103 100 150 103 100 50 50 19 14 0 0 2006 2007 2008 2009 Q1 2010 2006 2007 2008 2009 Q1…
  30. Barclays – Ion Geophysical Corp – slide 30
    EBITDA 2003-Q1 2010 ( Millions) 190 156 140 122 83 90 72 43 40 21 18 -9 (10) (60) 2003 2004 2005 2006 2007 2008 2009 Q1 2010 EBITDA (earnings before net interest expense, taxes, depreciation, and amortization) *…
  31. Barclays – Ion Geophysical Corp – slide 31
    Additional Detail Balance Sheet: Q1 2010 Q1 2010 (000) Cash 46,344 Debt Detail: Term A 106,250 Capital Leases 3,278 Other 4,924 Debt 114,452 Equity 338,486 NOTE: 100M undrawn credit facility will be available [ 31 ]
  32. Barclays – Ion Geophysical Corp – slide 32
    Appendix: INOVA Joint Venture with BGP (CNPC) Joint Venture [ 32 ]
  33. Barclays – Ion Geophysical Corp – slide 33
    Who is BGP BGP is the worlds largest land seismic contractor with over 110 crews with approximately serving international markets. BGP is wholly owned by CNPC, the largest Chinese integrated oil and gas company. CNPC operates in…
  34. Barclays – Ion Geophysical Corp – slide 34
    The Strategy of the Joint Venture Leverage the R&D of ION and Operational Expertise of BGP. R&D centers will remain primarily in the U.S. and Canada with much of the manufacturing moving to China to reduce costs. Field test new…
  35. Barclays – Ion Geophysical Corp – slide 35
    The BGP/ION Joint Venture Terms BGP and ION contributed all land equipment technology and businesses, less geophones, to the JV. BGP purchased 51% of the JV for the value of their contributed assets plus 108 million in cash to…
  36. Barclays – Ion Geophysical Corp – slide 36
    NewCo JVthe first year New combined management team established Corporate headquarters in Beijing and a secondary headquarters and R&D center in Houston Integration and alignment of the combined BGP and ION legacy workforce…
  37. Barclays – Ion Geophysical Corp – slide 37
    Appendix: Basin Span Basin Spans [ 37 ]
  38. Barclays – Ion Geophysical Corp – slide 38
    Overview of a BasinSPAN Program Comprehensive view of the petroleum system Integrates geology and geophysics Ultra-deep view Source rock deposition Migration pathways Sediment fairways Customized program design Acquisition…
  39. Barclays – Ion Geophysical Corp – slide 39
    BasinSpan Example: ArcticSpan High Potential in the Region Estimates place 25% of all remaining undiscovered reserves in the Arctic. Source: USGS, World Petroleum Assessment [ 39 ]
  40. Barclays – Ion Geophysical Corp – slide 40
    Integrated Approach to ArcticSpan Hardware, Software and Solutions Expertise Integrated Seismic Solutions (ISS) Marine Imaging Systems DigiSTREAMERTM Arctic Operational Experience Ice management Continuous recording Project…
  41. Barclays – Ion Geophysical Corp – slide 41
    2009 NE GreenlandSPAN Accomplishments Successfully Acquired Towed Streamer Data in 10/10ths Ice 9/10ths Ice 10/10ths Ice [ 41 ]
  42. Barclays – Ion Geophysical Corp – slide 42
    Appendix: FireFly FireFly [ 42 ]
  43. Barclays – Ion Geophysical Corp – slide 43
    The FireFly Ecosystem A Comprehensive Approach [ 43 ]
  44. Barclays – Ion Geophysical Corp – slide 44
    FireFly Commercialization Update A combination of sales and rental/purchase agreements China Qaidam Basin First commercial sale of FireFly 2 x 3D survey completed in 2009 Tesechoacan 3D Comesa and Pemex Blocker 3D projects…
  45. Barclays – Ion Geophysical Corp – slide 45
    Marcellus Shale Appalachia Krause 3D Apr-May 2010 [ 45 ]
  46. Barclays – Ion Geophysical Corp – slide 46
    Base Camp in Pennsylvania [ 46 ]
  47. Barclays – Ion Geophysical Corp – slide 47
    Challenging Terrain in Appalachia Marcellus Shale Gas - Appalachia Farms and forest, multiple road crossings and farm/wild-life pose a challenge to cable crews in terms of productivity. FireFly was deployed in April 2010 on a…
  48. Barclays – Ion Geophysical Corp – slide 48
    FireFly new visibility into field operations Geophysical attributes displayed at recording unit [ 48 ]
  49. Barclays – Ion Geophysical Corp – slide 49
    Pemex and FireFly 4 Projects Using Comesa as Contractor Coyula 3D July-Aug 2009 Tepetate 2D Tesechoacan 3D Feb-Mar 2010 Oct-Dec 2009 Chopo Sur 3D May-June 2009 [ 49 ]
  50. Barclays – Ion Geophysical Corp – slide 50
    FireFly Operations Comesa Chopo Sur, Mexico Completed 2009 8000 FireFly stations 24000 channels 297 sq km - swamp 3849 sources 11767 receivers
  51. Barclays – Ion Geophysical Corp – slide 51
    Coyula - Urban Acquisition Local towns and villages in Mexico
  52. Barclays – Ion Geophysical Corp – slide 52
    Tesechoacan Weather Challenges Flooding in Mexico [ 52 ]
  53. Barclays – Ion Geophysical Corp – slide 53
    FireFly Quality control in Operations Addressing the needs of our clients Spatial visibility of data download process and statistical information Stations not yet harvested Shots collected per receiver % traces collected per…
  54. Barclays – Ion Geophysical Corp – slide 54
    Appendix: Marine Equipment Marine Equipment [ 54 ]
  55. Barclays – Ion Geophysical Corp – slide 55
    Analogy: Commercial Air Travel vs. Towed Streamer Operational Planning Commercial Air Travel Towed Streamer [IA] Flight Plan Survey Plan [ 55 ]
  56. Barclays – Ion Geophysical Corp – slide 56
    Analogy: Commercial Air Travel vs. Towed Streamer Operational Command & Control Intelligence Commercial Air Travel Towed Streamer [IA] Auto Pilot Orca [ 56 ]
  57. Barclays – Ion Geophysical Corp – slide 57
    Analogy: Commercial Air Travel vs. Towed Streamer Dynamic Operational Execution Commercial Air Travel Towed Streamer [IA] Dynamic Horizontal Control Tail rudder DigiFIN Dynamic Vertical Control Wing flaps…
  58. Barclays – Ion Geophysical Corp – slide 58
    [IA] in Action Orca Software Controlling the Streamer Spread via DigiFIN [ 58 ]
  59. Barclays – Ion Geophysical Corp – slide 59
    Appendix: Multi-Client Amortization Multi-Client Amortization [ 59 ]
  60. Barclays – Ion Geophysical Corp – slide 60
    MultiClient Amortization Our method of amortizing the costs of a multi-client data library available for commercial sale is the greater of (i) the percentage of actual revenue to the total estimated revenue multiplied by the total…

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