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Investor Presentation – Ion Geophysical Corp

Ion Geophysical Corp · Jan 25, 2010 · 61 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. Investor Presentation – Ion Geophysical Corp – slide 1
    ION in Transformation While Weathering the Storm Brian Hanson, CFO Q1 2010 January 25, 2010
  2. Investor Presentation – Ion Geophysical Corp – slide 2
    Forward-looking Statement Todays presentation may contain forward-looking statements within the meaning of the Private Securities Litigation g Reform Act of 1995. These forward-lookingg statements include statements as to…
  3. Investor Presentation – 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. Investor Presentation – Ion Geophysical Corp – slide 4
    ION Served Market Approximately 3.8 Billion 2008 Land Systems Marine Systems y ION Competition Data Processing g 2D Regional Multi-client Programs 0 500 1000 1500 Marine systems does not include permanent OBC…
  5. Investor Presentation – Ion Geophysical Corp – slide 5
    Business Increasingly International Location of Discoveries 100 MMBOE 2001 2001 2005 2005 Discoveries Discoveries 100 249 mmboe 250 499 mmboe Offshore Offshore 29% 29% 500 999 mmboe 100% = 3,058 Billion BOE 1000 UP mmboe…
  6. Investor Presentation – Ion Geophysical Corp – slide 6
    2009 Both a Year of Challenges and Opportunity The financial crisis combined with oil and gas price collapse put tremendous pressure on ION. All business b siness units, nits with ith the e exception ception of GXT data…
  7. Investor Presentation – Ion Geophysical Corp – slide 7
    IONs Long Term Strategy Solving the most complex reservoir imaging problems A leader in geophysical imaging technology and services that aims at solving the toughest problems. bl Balanced portfolio from early adopter technology for…
  8. Investor Presentation – Ion Geophysical Corp – slide 8
    Diversified Technology Portfolio with Products in Various Stages of the Product Lifecycle A Portfolio Approach ARAM products complement our product portfolio 2009 2004 Vibrators with robust Land System Four margin products in…
  9. Investor Presentation – Ion Geophysical Corp – slide 9
    ION Geophysical LAND MARINE SOLUTIONS Cable System Towed Streamer Data Processing Cable-less System Ocean Bottom Multi-Client Sound Sources Operating Systems Data Library 2008 ION Revenue 2008 ION Sales Margin Land, 55.3,…
  10. Investor Presentation – Ion Geophysical Corp – slide 10
    Land Imaging Systems Segment Cable Systems y Cable-less Systems y Sound Sources Low cost, highly reliable Highly productive system Industry workhorse analog system (ARAM) Access in challenging Highly reliable in both desert…
  11. Investor Presentation – Ion Geophysical Corp – slide 11
    2008 Estimated Global Seismic Crew Count Estimates for 2008(1) EAME & Russia & North Latin Total ISC CIS China/AP America America of Crews 872 176 240 305 118 33 Dynamite/Vibe y a te/ be 55% / 45% 25% / 75% 50% / 50% 80% /…
  12. Investor Presentation – Ion Geophysical Corp – slide 12
    Land technology trends High Density Shooting for higher resolution Shallow plays such as Heavy Oil are 10X trace density of more conventional basins Benefits seen above leading to a move towards denser sampling in mature basins to…
  13. Investor Presentation – Ion Geophysical Corp – slide 13
    Demand for Increasing Channel Count Need for better reservoir description driving demand [ 13 ]
  14. Investor Presentation – Ion Geophysical Corp – slide 14
    Land Survey Schematic Cabled Cable-less Cable less 5,000 Stations 6,000 Stations [ 14 ]
  15. Investor Presentation – Ion Geophysical Corp – slide 15
    The FireFly Ecosystem A Comprehensive Approach Navigation and positioning Survey design for optimum image Node-based, full-wave recording system GIS planning and Comprehensive data management operations support [ 15 ]
  16. Investor Presentation – Ion Geophysical Corp – slide 16
    The FireFly Difference Our Experience on Image Quality & Operating Metrics Conventional 20 - 40 Fold Image Quality 400 500 Fold Conventional 75 Man Crew Crew Size 45 Man Crew Pre-- Layout Shooting Pickup Processing…
  17. Investor Presentation – Ion Geophysical Corp – slide 17
    Marine Imaging Systems Segment Towed o ed Streamer/ St ea e / Ocea Bottom Ocean otto Operating p g Systems y Positioning Systems Acquisition Systems Short term incremental First seabed digital full wave Provides real-time,…
  18. Investor Presentation – Ion Geophysical Corp – slide 18
    Total Vessel Count Including combined Streamer KM Towed Streamer Fleet 180 9 000 9,000 160 8,000 Capacity Range: 11 140 7,000 120 6,000 unt Streamer k m Vessel cou 100 5,000 80 Capacity Range: 11 4,000 60 3,000 40…
  19. Investor Presentation – Ion Geophysical Corp – slide 19
    A Matter of Perspective 16 x 12km Spread Configuration Overlaid on Manhattan 16 x 12 towed streamer spread configuration [ 19 ]
  20. Investor Presentation – Ion Geophysical Corp – slide 20
    Analogy: Commercial Air Travel vs. Towed Streamer Operational Planning Commercial Air Travel Towed Streamer [IA] Flight Plan Survey Plan [ 20 ]
  21. Investor Presentation – Ion Geophysical Corp – slide 21
    Analogy: Commercial Air Travel vs. Towed Streamer Operational Command & Control Intelligence Commercial Air Travel Towed Streamer [IA] Auto Pilot Orca [ 21 ]
  22. Investor Presentation – Ion Geophysical Corp – slide 22
    Analogy: Commercial Air Travel vs. Towed Streamer Dynamic Operational Execution Commercial Air Travel Towed Streamer [IA] Dynamic Horizontal Control Tail rudder DigiFIN g Dynamic Vertical Control Wing flaps…
  23. Investor Presentation – Ion Geophysical Corp – slide 23
    VectorSeis Ocean: Ocean Bottom Application [ 23 ]
  24. Investor Presentation – Ion Geophysical Corp – slide 24
    [IA] in Action Orca Software Controlling the Streamer Spread via DigiFIN [ 24 ]
  25. Investor Presentation – Ion Geophysical Corp – slide 25
    Seismic Imaging Solutions Segment Data Processing Multi-Client Data Libraries Leading Depth Imaging Deal origination for oil Result of ISS multi-client Technology. company underwritten multi- projects. F Focusedd on mostt…
  26. Investor Presentation – Ion Geophysical Corp – slide 26
    ION 2009 Global Processing Scale and Footprint GSC Project Experience [ 26 ]
  27. Investor Presentation – Ion Geophysical Corp – slide 27
    Overview of a BasinSPAN Program Comprehensive view of the petroleum system Integrates geology and geophysics Ultra-deep view Source rock deposition Migration g p pathways y Sediment fairways Customized program design…
  28. Investor Presentation – Ion Geophysical Corp – slide 28
    Summary The continuing economic recovery will likely sustain or drive oil prices higher than 60-80 bbl. Supply will once again become the main driver. driver IONs short term goal has been to weather the storm by focusing on cash…
  29. Investor Presentation – Ion Geophysical Corp – slide 29
    Appendix Selected Financial Highlights Firefly Joint Venture Basin Spans Multi-Client Multi Client Amortization [ 29 ]
  30. Investor Presentation – Ion Geophysical Corp – slide 30
    Appendix: Financial Information Selected Financial Highlights [ 30 ]
  31. Investor Presentation – Ion Geophysical Corp – slide 31
    Net Revenues 2002-2009 Q3 YTD ( Millions) 800 713 700 680 600 504 500 400 363 299 300 241 200 150 119 100 0 2002 2003 2004 2005 2006 2007 2008 YTD 2009 [ 31 ]
  32. Investor Presentation – Ion Geophysical Corp – slide 32
    Revenues and Gross Margin Percent 2005-2009 Q3 YTD Revenues ( Millions)) Gross Margin g % 750 713 40 680 700 650 600 35 32.9 550 504 500 30.6 30.6 450 30 28.5 400 363 27 0 27.0 350 299 300 25 250 200 150 20 100 50 2005 2006…
  33. Investor Presentation – Ion Geophysical Corp – slide 33
    Segment Revenues 2005-2009 Q3 YTD ( Millions) Land Imaging Systems Marine Imaging Systems 350 325 200 178 183 300 250 150 128 206 200 200 157 100 150 69 72 100 69 50 50 0 0 2005 2006 2007 2008 YTD 2005 2006 2007 2008 YTD…
  34. Investor Presentation – Ion Geophysical Corp – slide 34
    EBITDA 2005-2009 Q3 YTD ( Millions) 190 156 140 122 90 83 51 43 40 21 9 -9 (10) -49 (60) 2002 2003 2004* 2005 2006 2007 2008 YTD 2009 EBITDA (earnings before net interest expense, taxes, depreciation, and amortization)…
  35. Investor Presentation – Ion Geophysical Corp – slide 35
    Source and Use ( in millions) Sources JV Stake Sale 108.5 E it Off Equity Offering i (PF for f Bridge) B id ) 67 1 67.1 100M Revolver (No drawdown) - Term Loan Refinancing 106.2 Total Sources 281.8 Uses Repayment of…
  36. Investor Presentation – Ion Geophysical Corp – slide 36
    Additional Detail Balance Sheet: Pre and Post Close (000) Q3 2009 Post Close 2 Cash 19,556 [30,000-60,000] Debt Detail: Revolver 98,000 0 Seller's Note 35,000 0 Term A 106 250 106,250 106 250 106,250 Icon 1 19,774 - Capital…
  37. Investor Presentation – Ion Geophysical Corp – slide 37
    Appendix: Firefly Firefly [ 37 ]
  38. Investor Presentation – Ion Geophysical Corp – slide 38
    Sequence of FireFly Deployments Cumulative Recording Since 2005 FireFly Recording Points 29,438 46,425 76,606 91,098 58,192 41,395 18,841 8,286 ,,,,, 450 400 350 FireFly Trace Count (Millions) 300 250 200 150 100…
  39. Investor Presentation – Ion Geophysical Corp – slide 39
    FireFly Commercialization Update A combination of sales and rental/purchase agreements China Qaidam Basin 3D First commercial sale of FireFly Receiver stations: 10,808 Source points: 13,632 In progress Chopo Sur 3D Comesa and…
  40. Investor Presentation – Ion Geophysical Corp – slide 40
    Qaidam Base Camp [ 40 ]
  41. Investor Presentation – Ion Geophysical Corp – slide 41
    East Texas Blocker Projects Survey size: 170 sq Kms sq. ION Haynesville Line 3000 Project started August g 1 Source will be mostly Vibroseis 68 sq mi. - Blocker 3D with some dynamite and Power Plant gunboat 7 sq mi. -…
  42. Investor Presentation – Ion Geophysical Corp – slide 42
    Blocker - Varying Access and HES Challenges Dense Forest and Water Hazards [ 42 ]
  43. Investor Presentation – Ion Geophysical Corp – slide 43
    Difficult Navigation Vibroseis and Personnel Challenged by the Terrain [ 43 ]
  44. Investor Presentation – Ion Geophysical Corp – slide 44
    Pemex and FireFly 3 Projects Using Comesa as Contractor Area 2 Coyula IN PROGRESS Area 3 Tesechoacan Area 1 Chopo Sur - COMPLETED [ 44 ]
  45. Investor Presentation – Ion Geophysical Corp – slide 45
    FireFly Operations Comesa Chopo Sur, Mexico Start: May 2009 8000 FireFly stations 297 sq km 3849 sources 11767 receivers Completed [ 45 ]
  46. Investor Presentation – Ion Geophysical Corp – slide 46
    Coyula - Urban Acquisition [ 46 ]
  47. Investor Presentation – Ion Geophysical Corp – slide 47
    Appendix: Joint Venture Joint Venture
  48. Investor Presentation – Ion Geophysical Corp – slide 48
    Who is BGP BGP is the worlds largest land seismic contractor with over 110 crews with approximately pp y servingg international markets. BGP is wholly owned by CNPC, the largest Chinese integrated oil and gas company. company…
  49. Investor Presentation – Ion Geophysical Corp – slide 49
    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…
  50. Investor Presentation – Ion Geophysical Corp – slide 50
    The BGP/ION Joint Venture Terms BGP and ION contribute all land equipment technology and businesses, less geophones, to the JV. Total JV equity value estimated at 275 million. BGP purchases 51% of the JV for the value of their…
  51. Investor Presentation – Ion Geophysical Corp – slide 51
    Financial Impact on IONs Balance Sheet After closing the ARAM transaction ION was planning to issue a 175M bond offering to pay-off a short term sellers note of 35M 35M, a 40M bridge note from Jefferies, and nearly 100M that was…
  52. Investor Presentation – Ion Geophysical Corp – slide 52
    Steps to Close the JV and Governance Expect to close in March of 2010. Finalize definitive agreement Finalize refinancing with Chinese banks. Complete the mutually agreed upon 5 year plan. Finalize operational details related to…
  53. Investor Presentation – Ion Geophysical Corp – slide 53
    NewCo JVthe first year New combined management team to establish Corporate headquarters in Beijing and a secondary headquarters and R&D center t in i Houston H t Integration and alignment of the combined BGP and ION legacy…
  54. Investor Presentation – Ion Geophysical Corp – slide 54
    Appendix: Basin Span Basin Spans [ 54 ]
  55. Investor Presentation – Ion Geophysical Corp – slide 55
    BasinSpan Example: ArcticSpan High Potential in the Region Estimates place 25% of all remaining undiscovered reserves in the Arctic. Source: USGS,, World Petroleum Assessment [ 55 ]
  56. Investor Presentation – Ion Geophysical Corp – slide 56
    Integrated Approach to ArcticSpan Hardware, Software and Solutions Expertise Integrated Seismic Solutions (ISS) Marine Imaging Systems DigiSTREAMERTM Arctic A ti Operational O ti l Experience E i Ice management Continuous…
  57. Investor Presentation – Ion Geophysical Corp – slide 57
    2009 NE GreenlandSPAN Accomplishments Successfully Acquired Towed Streamer Data in 10/10ths Ice 9/10ths Ice 10/10ths Ice [ 57 ]
  58. Investor Presentation – Ion Geophysical Corp – slide 58
    Appendix: Multi-Client Amortization Multi-Client Amortization [ 58 ]
  59. Investor Presentation – Ion Geophysical Corp – slide 59
    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 t l revenue tot the th total t t l estimated ti t d revenue…
  60. Investor Presentation – Ion Geophysical Corp – slide 60
    INDEX Introduction.. page 3 Ions Long Term Strategy.. page 7 Ion Geophysical divisions.. page 9 Land Division... page 10 Marine Division Division page 17 Solutions Division... page 25 Appendix.. page 29 A Appendix: di Fi…
  61. Investor Presentation – Ion Geophysical Corp – slide 61
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