From Vision to Reality Building a 21st Century Reservoir Imaging Company Sidoti & Company, LLC - Fifth Annual Palm Beach Emerging Growth Institutional Investor Presented by Bob Peebler President / CEO January 23, 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…
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 4 Location of Discoveries 100 MMBOE Source: CERA [4]
Majority of Global Resource Base is Onshore Hydrocarbon Distribution in the Top 25 Basins 5 Known Reserves + Mean Undiscovered Resources Billions of Barrels of Oil Equivalent (Gas + Oil + LNG) 40 538 126 85 34* 94 72 33…
Seismic Imaging Market 6 Ten (Billion) by 10 Annual Revenues by Sub-sector ( Millions) 12,000 CAGR = 8.8% Processing 10,000 Land equipment Land acquisition 8,000 Marine equipment CAGR = 6.0% Seabed acquisition 6,000…
Our Strategy Approach the business as a portfolio of three segments Mature businesses: benefit from the rising tide Fixer-uppers: gain market share with new products/positioning Game-changers: transform their segments (the largest…
Enabling Our Strategy Key Actions Since 2004 Acquired GX Technology (GXT) and Concept Systems (2004) Invested as a corporate VC in Transform Software (2005) Develop a next-generation workstation for interpreting full-wave data…
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 2006 Revenues) 700 100% = 504 million 600 CAGR = 43% 500 147M…
A View on OFSE Cycles Technology-intensive Providers Benefit in Long Up-Cycles [ 10 ]
R&D and Revenue Changes (2003-06) Building Long-Term Earnings Power US (Millions) R&D Revenues 40 38 Million 600 506 Million 35 500 14% 30 400 17% 25 68% +147% 20 Million 20 300 51% 15 200 68% 150 Million 10 10% -16%…
ION Product Life Cycle Positioning A Portfolio Approach 2007 2004 Land System Vibrators Marine Four Geophones Spectra Seismic Imaging Solutions Streamer Scorpion & Data Processing Products Vibrators Wave Equation Geophones…
ION Total Revenues Revenues in Millions 1800 1600 1400 1200 Seismic Imaging Solutions 1000 Land 800 Marine 600 400 200 0 2006 2012E Gross margin 30.6% 35 37% Op margin 7.9% 15 18% [ 13 ]
The Third Era of Seismic Imaging Digital, Full-wave Full-wave Technology S-curves in Seismology Era 2007 3D Era 2000s 1970s 2D Era Characteristics of the Full-wave Era Anticipated Results Measurement of both P- and…
At the Core of Full-wave Imaging VectorSeis Digital Sensors From silicon wafer to field-ready sensor (for both land & seabed applications) Gold plated silicon wafer ASIC 3 sensor packages VectorSeis (Si-flex MEMS accelerometer)…
High Density, Full-wave Drives Data Explosion Requires New Processing and Data Management Techniques 2D Era 3D Era Full-wave Era 1,000,000 1,000 Average Survey Size (GB) 1 .1 1960 1980 2000 2020 [ 16 ]
Full-Wave Moving Into Early Mainstream Market Full-wave Imaging Delineates Gas-Bearing Channel Sand P-wave image Full-wave image Channel Sands Difficult to Identify Channel Sands Clearly Visible [ 17 ]
Full-Wave Moving Into Early Mainstream Market Full-wave Imaging Delineates Sand Shear from Shale Impedance Shear Impedance Shale Sand Full Wave Compared to P-Wave for Lithological Delineation She a r data m R ec orded Si…
Pushing the Envelope in Land Processing (Fractured) Reservoir Characterization & Well Optimization Shale & Coal Sand Undrilled, highly prospective reservoir [ 19 ]
Full-Wave Moving Into Early Mainstream Market Full-wave Imaging Identifies Fracture Zones Note presence of Same lithology fractures in No fractures producing zone No production New well location [ 20 ]
Full-wave Gets Results in China Imaging Project Identifies Most Productive Well in Province Excerpts from Press Release Local Chinese Newspaper GAS DRAGON RISING FROM THE DEPTHS OF THE WESTERN SICHUAN BASIN Best well in the…
FireFly- A Game Changer for Land Imaging The Winning Model: More for Less Deliver a better image in a shorter period of time and at lower cost Better image-high density/full-wave Reduced cycle time Higher productivity-lower…
The FireFly Difference Station Equipment Layout & Pre- Surveying Density Deployment Shooting Processing Conventional Cable Stakes & Cable-Constrained 25 Tons Visual & Manual Flags (200 x 1800) Resource Heavy LIDAR &…
The FireFly Difference Our Experience on Image Quality & Operating Metrics Conventional 20 - 40 Fold Image Quality 400 1000 Fold Conventional 75 Man Crew Crew Size 45 Man Crew Pre- Layout Shooting Pickup Processing…
The Latest on FireFly Survey Completed for Apache (East Texas) Dense Foliage Farms and Agriculture Marshy Wetland (Flooding) [ 25 ]
FireFly Status Assimilating experiences from BP and Apache surveys Release 1.3 this fall for continued Field Trials Release 2.0 during first of 2008. Improvements in power management Improvements for recording reliability General…
Summary We believe we are in a long cycle where technology will become the main driver of profitability Since 2003, I/O has repositioned its strategy and portfolio to capitalize on these trends We have benefited from the rising…
Balance Sheet Highlights 12/31/05 12/31/06 9/30/07 Total LT Debt 71.5 MM 71.0 MM 71.5 MM LT Debt/Cap 12.1% 11.9% 12% Net Debt/Cap 10.2% 10.2% 9% Cash & Equity 15.9 MM 17.1 MM 26.0 MM [ 34 ]
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