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Pareto Oil & Offshore Conference – TGS

TGS · Sep 14, 2016 · 27 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. Pareto Oil & Offshore Conference – TGS – slide 1
    Pareto Oil & Offshore Conference Kristian Johansen CEO 14th September, 2016
  2. Pareto Oil & Offshore Conference – TGS – slide 2
    Agenda Introduction Market Overview TGS Strategy Q2 2016 Financial Highlights Appendix (financial information) 2016 TGS-NOPEC Geophysical Company ASA. All rights reserved. 3
  3. Pareto Oil & Offshore Conference – TGS – slide 3
    This is TGS The Worlds largest geoscience data company Traded on Oslo Stock Exchange, part of OBX Index (25 most liquid shares) Headquarters in Oslo and Houston (Operational) Regional offices in London, Perth, Calgary, Mexico City…
  4. Pareto Oil & Offshore Conference – TGS – slide 4
    Agenda Introduction Market Overview TGS Strategy Q2 2016 Financial Highlights Appendix (financial information) 2016 TGS-NOPEC Geophysical Company ASA. All rights reserved. 5
  5. Pareto Oil & Offshore Conference – TGS – slide 5
    Challenging Market for Exploration Year on Year decline in spending Change in Global E&P Spending Second consecutive 20%+ decline in E&P spending 30 27 26 expected this year 23 23 22 21 19 19 20 16 16 Impact on exploration…
  6. Pareto Oil & Offshore Conference – TGS – slide 6
    Long-Term Outlook Positive Global Production / Consumption (mn b/d) Global Oversupply Moderating Global oversupply is anticipated to continue to moderate 2.0 2.0 2.3 1.7 through 2017 from a Q4 2015 high 1.4 1.3 Market balance…
  7. Pareto Oil & Offshore Conference – TGS – slide 7
    Key Trends in the Seismic Industry Seismic sector has underperformed financially Seismic* Return on Average Capital Employed 15% ROCE below cost of capital Capital intensive and low entry barriers 10% Critical product for end-user…
  8. Pareto Oil & Offshore Conference – TGS – slide 8
    Agenda Introduction Market Overview TGS Strategy Q2 2016 Financial Highlights Appendix (financial information) 2016 TGS-NOPEC Geophysical Company ASA. All rights reserved. 9
  9. Pareto Oil & Offshore Conference – TGS – slide 9
    Areas with Faster Payback will Likely Recover First Chart highlights areas that are likely to see incremental seismic activity first as market conditions improve First movers will be areas with the best economics, or a…
  10. Pareto Oil & Offshore Conference – TGS – slide 10
    Fast & Flexible Business Model Personnel and Other Operating Costs* -40 Reacting quickly to right size the company Operating costs down 30% year-on-year -30 Operating costs down 51% since 2014 -20 MUSD Variable pay drives…
  11. Pareto Oil & Offshore Conference – TGS – slide 11
    Solid Balance Sheet Backing TGS strategy Other 66 Current Goodwill 68 171 liabilities Cash 162 37 Non-current liabilities Receivables 255 Balance sheet remains healthy through down-cycle 1167 Equity Cash balance per Q2 2016 of…
  12. Pareto Oil & Offshore Conference – TGS – slide 12
    Strategic library acquisitions Dolphin library acquisition Agreement in principle to buy the majority of the Dolphin MC library together with PGS Enhancing TGS already strong position in areas such as the Barents Sea, the North…
  13. Pareto Oil & Offshore Conference – TGS – slide 13
    Solid Value Creation Over Time Share price development* Long-term value creation track-record 1,100 Avg. annual return since TGS IPO in 1997 1,000 Annual total return of 11% since IPO in 1997 900 TGS 11.4% 800 Well above both the…
  14. Pareto Oil & Offshore Conference – TGS – slide 14
    Q3 Investment Focus 2016 TGS-NOPEC Geophysical Company ASA. All rights reserved. 15
  15. Pareto Oil & Offshore Conference – TGS – slide 15
    2016 Key Objectives Free cash flow generation Consistency in delivering product quality Significant cost efficiencies Intense client focus 2016 TGS-NOPEC Geophysical Company ASA. All rights reserved. 16
  16. Pareto Oil & Offshore Conference – TGS – slide 16
    Agenda Introduction Market Overview TGS Strategy Q2 2016 Financial Highlights Appendix (financial information) 2016 TGS-NOPEC Geophysical Company ASA. All rights reserved. 17
  17. Pareto Oil & Offshore Conference – TGS – slide 17
    Q2 2016 Financial Highlights Total Revenues Q2 2016 Revenue Distribution 300 Other 12% 250 AMEAP 200 9% 150 3% 298 Y/Y 100 190 172 169 NSA 140 132 114 52% 50 64 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Europe 2014 2014 2015 2015 2015…
  18. Pareto Oil & Offshore Conference – TGS – slide 18
    Summary Signs of improvement in oil companies willingness to invest in seismic data during Q2 2016, however, the market is expected to remain challenging and volatile in the near term Long term fundamentals continues to be positive…
  19. Pareto Oil & Offshore Conference – TGS – slide 19
    Thank you Kristian Johansen CEO 2016 TGS-NOPEC Geophysical Company ASA. All rights reserved.
  20. Pareto Oil & Offshore Conference – TGS – slide 20
    Agenda Introduction Market Overview TGS Strategy Q2 2016 Financial Highlights Appendix (financial information) 2016 TGS-NOPEC Geophysical Company ASA. All rights reserved. 21
  21. Pareto Oil & Offshore Conference – TGS – slide 21
    Net Revenues Late sales revenues Prefunding revenues 250 100 200 80 150 60 226 94 100 3% Y/Y 40 74 -50% Y/Y 62 130 51 53 50 82 90 90 84 20 37 72 26 38 23 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2014 2015 2015…
  22. Pareto Oil & Offshore Conference – TGS – slide 22
    Net Revenue Breakdown Q2 2016 Q2 2015 GPS GPS 10% 10% 2D 15% 2D 48% 3D 42% 3D 75% Q2 2016 Q2 2015 Other Other 12% 14% AMEAP 9% AMEAP 16% NSA NSA 52% 51% Europe 27% Europe 19% 2016 TGS-NOPEC Geophysical…
  23. Pareto Oil & Offshore Conference – TGS – slide 23
    Operating Expenses, EBIT, Free Cash Flow Operating expenses * Amortization and impairment * 40 250 35 200 30 25 150 -30% Y/Y 20 37 230 15 32 100 62% - rate 25 28 143 24 22 10 18 50 105 99 17 81 69 5 74 62 0 0 Q3 Q4 Q1 Q2 Q3 Q4…
  24. Pareto Oil & Offshore Conference – TGS – slide 24
    Multi-Client Library Operational investments and prefunding ratio Multi-client library - NBV 200 100% 1,000 Operational investments 90% 950 Prefunding ratio 80% 150 70% 900 60% 100 50% 850 976 163 40% 919 126 135 30%…
  25. Pareto Oil & Offshore Conference – TGS – slide 25
    Q2 2016 Income Statement USD million, except EPS Q2 2016 Q2 2015 Change in % Net revenues 114 140 -18% Cost of goods sold proprietary and other 0.8 0.1 1435% Amortization of multi-client library 62% 69 74 -6% Gross margin 44 66…
  26. Pareto Oil & Offshore Conference – TGS – slide 26
    Q2 2016 Cash Flow Statement USD million Q2 2016 Q2 2015 Change in % Received payments from customers 28 141 -80% Payments for operational expenses (19) (25) 25% Paid taxes - (29) 100% Operational cash flow 9 86 -89% Investments in…
  27. Pareto Oil & Offshore Conference – TGS – slide 27
    Balance Sheet USD million Q2 2016 Q1 2016 Change in % Q4 2015 Assets Cash and cash equivalents 162 210 -23% 163 Other current assets 255 189 35% 308 Total current assets 417 399 5% 471 Intangible assets and deferred tax asset 92 92…

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