From Vision to Reality Building a 21st Century Reservoir Imaging Company Brian Hanson EVP/CFO and Jim Hollis EVP/COO, ION Solutions May 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 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. 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…
Future Trends of Land Acquisition The Game will Change Significantly Integrated, technology-driven systems (recording / source / operations) More capital intensive Higher skilled labor force Higher entry barriers Growing…
Seismic Imaging Market 7 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…
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) 100% = 713 million 700 CAGR = 48% 600 500 173M…
A View on OFSE Cycles Technology-intensive Providers Benefit in Long Up-Cycles [ 10 ]
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%…
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 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% [ 13 ]
The Third Era of Seismic Imaging Technology S-curves in Seismology Characteristics of the Full-wave Era Full-wave Era Measurement of both P- and S-waves Densely sampled data 2000s Game-changing recording systems 3D Era 2007…
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 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…
The FireFly Ecosystem A Comprehensive Approach Survey design for optimum image Navigation and positioning Node-based, full-wave recording system GIS planning and operations support Comprehensive data management Better…
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 &…
Connex Pulling It All Together Integrated stakeless Reduction of survey costs; crews, stakes, survey vehicles, infrastructure, re-flagging Reduction in acquisition cycle time Navigation of all field crews; hazard and HSE exclusion…
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…
FireFly Evolution with Field Trials Key lessons learned from Version 1 Increased ruggedness Greater reliability More powerful and flexible telecommunications Radio communications to support international operations Scalable…
FireFly Version 2 - Timeline Version 2.0 Field Trials Q1 / Q2 08 (now) Version 2.0 Commercial System end Q2 08 Multi-client survey mid July 2008 [ 26 ]
FireFly Vision Becomes Reality Compromise is no longer required in land seismic programs New cableless systems are emerging that will deliver more for less Improved subsurface image quality High density / high fold / full…
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 12/31/07 3/31/08 Total LT Debt 71.5 MM 71.0 MM 9.8 MM 8.3 MM LT Debt/Cap 12.1% 11.9% 2% 1% Net Debt/Cap 10.2% 10.2% -2% -2% Cash & Equity 15.9 MM 17.1 MM 36.4 MM 36 MM [ 35 ]
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