From Vision to Reality Building a 21st Century Reservoir Imaging Company Lehman Brothers CEO Energy/Power Conference Bob Peebler, President/CEO and Brian Hanson, EVP/CFO September 2, 2008
Forward-looking Statement All presentations today 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,…
Todays Discussion ION Geophysical Corporation: A Quick Introduction Market Drivers: Driving our Technology Investments IONs Strategy in the Land Market The ARAM Acquisition FireFly Commercialization Update Summary Select…
The History of ION A Leading Technology-Focused Seismic Solutions Provider Global presence via 20 international offices Founded in 1968 (NYSE: IO) Public in 1991 Pioneered 3D land seismic New management team in 2003 Acquisition of…
ION Geophysical Corporation An Integrated Offering ISS Integrated Seismic Services FireFly Seabed Geophysical Solutions Survey Data Geophysical Services design processing Land Marine Software Seismic Geophysical…
Our Systems Businesses Recognized Leaders in Seismic Acquisition Technology Land Imaging Systems Driving efficient, high-station count, full-wave acquisition Energy source (Vibroseis) and source control systems Analog geophones and 3C…
Our Solutions Businesses Services that Provide Best-in-Class Images of the Subsurface GXT Imaging Solutions Advanced data processing services for complex reservoirs Leaders in PreSDM and full-wave imaging Award-winning tools for…
Our Solutions Businesses Game-changing Approaches to Full-wave Imaging FireFly Solutions A next-generation approach to land imaging Centered upon the cableless FireFly acquisition platform Enables highly productive, HSE-friendly…
Financial Results and Business Mix 9 Since the Inception of Our New Strategy in 2003 Consolidated Revenues Mix of Business by Segment ( Millions) (Percentage of 2007 Revenues) 900 100% = 713 million 800 CAGR = 48% 700 600 173M…
Todays Discussion ION Geophysical Corporation: A Quick Introduction Market Drivers: Driving our Technology Investments IONs Strategy in the Land Market The ARAM Acquisition FireFly Commercialization Update Summary Select…
Formulating our Vision for Growth Key Beliefs Underpinning our Strategy (Circa 2003) The E&P industry is entering a long up-cycle Supply-demand imbalance will result in higher oil and gas prices A changing playing field of…
Business Increasingly International Location of Discoveries 100 MMBOE 2001 2001 2005 2005 Discoveries Discoveries 100 249 mmboe 250 499 mmboe 500 999 mmboe 1000 UP mmboe Source: CERA. [ 12 ]
A View on OFSE Cycles Technology-intensive Providers Benefit in Long Up-cycles [ 13 ]
R&D and Revenue Changes Building Long-term Earnings Power ( Millions) R&D (1) Revenues R&D(1) Revenues 60.0 800.0 713.1 Million 50.0 49.6 Million 16% 600.0 40.0 20% 49% +131% 30.0 400.0 20.3 Million 20.0 33% 64% 51% +277%…
Todays Discussion ION Geophysical Corporation: A Quick Introduction Market Drivers: Driving our Technology Investments IONs Strategy in the Land Market The ARAM Acquisition FireFly Commercialization Update Summary Select…
Majority of Global Resource Base is Onshore 16 Hydrocarbon Distribution in the Top 25 Basins Known Reserves + Mean Undiscovered Resources Billions of Barrels of Oil Equivalent (Gas + Oil + LNG) 40 538 126 85 34* 94 72 33 61…
Key Elements of IONs Land Strategy Leadership in emerging cableless high-density, full-wave systems Regain market share in mainstream cable-based analog systems Strong local presence in key land markets Former Soviet Union…
ION Land Acquisition System Strategy In the Context of Technology Adoption Cycles* High Channel Count Analog Low Channel Count Analog [Middle East, North Africa] [US Mid-continent - Conventional] II High Channel Count Digital…
Todays Discussion ION Geophysical Corporation: A Quick Introduction Market Drivers: Driving our Technology Investments IONs Strategy in the Land Market The ARAM Acquisition FireFly Commercialization Update Summary Select…
Background on ARAM Privately held, Canadian-headquartered manufacturer of high productivity, contractor-oriented, cable-based land seismic acquisition systems 200 employees, officed in Calgary, Houston, Moscow, Dubai, and China…
Land Systems Providers Estimated, Back-of-the-Envelope Market Shares 100% = US 500 - 700 Million in Worldwide Land Acquisition System Sales per Year Full-wave Analog ION ARAM Others [ 21 ]
The Land Acquisition Market Present State Illustrative: Market Segment Sizes Sensor Type Digital, 3C MEMS The vast majority of the existing market is for cable-based systems outfitted with geophones IONs offerings for this…
The Land Acquisition Market Potential Future State for ION Illustrative: Market Segment Sizes Sensor Type Digital, 3C MEMS A more robust, next-gen cable-based, full-wave recording system F I R Analog, cable-based system E…
ARAM Integration ARAM will manage the land cable business (analog and digital) Position ARAM Aries as the analog land cable system High margin Reliable system with satisfied customer base Sustain/support Scorpion Analog Scorpion…
Todays Discussion ION Geophysical Corporation: A Quick Introduction Market Drivers: Driving our Technology Investments IONs Strategy in the Land Market The ARAM Acquisition FireFly Commercialization Update Summary Select…
Land Acquisition Challenges Limitations of the Traditional Cable-based System Direct and indirect labor costs HSE issues Labor intensive Costly to scale Hard to compete against low-labor cost players Inventory/Asset Management…
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 [ 27 ]
Durham Ranch Moffat County, Northwestern Colorado Satellite image courtesy of Google Earth [ 28 ]
Durham Ranch A Closer View The Durham Ranch seismic survey 31 square miles high-density, full-wave Significant varying topography Significant environmental and safety challenges BLM restrictions related to protecting native…
Survey Parameters Densely Sampled, Full-wave Data Program FireFly Version 2.0 with 6,100 full-wave VectorSeis sensors Connex command & control software from Concept Systems 10,597 receiver points (comprising 327 line miles)…
Varying Topography Land Under BLM Stewardship Significant parts of the survey area was under The Bureau of Land Management (BLM). Concerns for wild life Protected species such as raptor nests Minimize the disturbance to local…
Varying Topography High Mountain Meadows with Livestock Upper Left: One of the helicopter drop-points for the bags containing FSUs and VectorSeis. Lower Right: An FSU and VectorSeis along the road, seemingly having no effect on…
Varying Topography Rugged Exposed Cliffs Upper Left: Crew has navigated to the receiver point using the NavTool (left) and is now drilling the hole for the VectorSeis sensor (middle). Once the sensor is in place, the FSU (right)…
The Durham Ranch Schedule Challenges The Timeline for the FireFly Survey at Durham Ranch FEB MAR APR MAY JUN JUL AUG SEP Time Line Challenges Getting the BLM permits in time Permitting Strong interest in FireFly made it possible…
The Technologies Making it Possible Stakeless Deployment (VectorSeis and FSUs) One of the Geokinetics deployment crews at work. Similar to the method of source deployment, the traditional method of deploying sensors relies on…
The Technologies Making it Possible Staging Trailer for Power and Data Management The Staging Trailer enables multiple tasks in the acquisition operation. It provides the initial charge to the FireFly systems when they arrive in…
Completing the Picture Bags in Staging Area, Heading out for Deployment Bags filled with FSUs and VectorSeis sensors get from the Staging Trailer area to deployment crews in the field. In the Durham Ranch survey, helicopters are…
Completing the Picture FireFly Recording Trailer Perched on a bluff roughly 1,000 feet above the valley floor, the FireFly Recording Trailer acts as the command & control center once acquisition operations begin. The Recording…
Todays Discussion ION Geophysical Corporation: A Quick Introduction Market Drivers: Driving our Technology Investments IONs Strategy in the Land Market The ARAM Acquisition FireFly Commercialization Update Summary Select…
Summary We believe we are in a long cycle where technology will become the main driver of profitability. Since 2003, ION has repositioned its strategy and portfolio to capitalize on these trends. We have benefited from the rising…
Todays Discussion ION Geophysical Corporation: A Quick Introduction Market Drivers: Driving our Technology Investments IONs Strategy in the Land Market The ARAM Acquisition FireFly Commercialization Update Summary Select…
Balance Sheet Highlights 12/31/05 12/31/06 12/31/07 6/30/08 Total LT Debt 71.5 MM 71.0 MM 9.8 MM 7.9 MM LT Debt/Cap 12.1% 11.9% 2% 1% Net Debt/Cap 10.2% 10.2% -2% 1% Cash & Equity 15.9 MM 17.1 MM 36.4 MM 18.8 MM [ 47 ]
ION Total Revenues Revenues in Millions 1750 1500 1250 ION Solutions 1000 Land Marine 750 CSL 500 250 0 2003 2007 2012E Gross margin 30.6% 35 37% Op margin 7.9% 15 18% [ 49 ]
[ 50 ]
Financial Highlights Acquisition price of CDN 350 million US 275 million in cash Remainder (US 75 million) in ION common stock Details of the cash-component financing have not yet been finalized Will be debt financed…
Loading...
