SeaBird Exploration Plc

Third Quarter Report 2014

2014 SUMMARY OBSERVATIONS FOR THE THIRD QUARTER

• Revenues for the quarter were $22.7 million, a decrease of 55% compared to Q3 2013 and down 49% relative to Q2 2014.
• Contract revenues for the period were $16.4 million, down 67% from Q3 2013 and a decrease of 60% from Q2 2014.

Multi-client revenues were $6.3 million, up 250% from $1.8 million reported in Q3 2013 and an increase of 70% from $3.7 million reported in Q2 2014.

EBITDA was negative $2.1 million compared to positive $13.2 million for Q3 2013 and positive $12.6 million for Q2 2014.

EBIT for the quarter was negative $11.1 million compared to positive $6.7 million for Q3 2013 and negative $2.6 million for Q2 2014.

Vessel utilization for the period was 65%.  Contract surveys during the third quarter represented 35% of vessel capacity compared to 72% during the second quarter 2014.  Multi-client surveys accounted for 30% of vessel capacity compared to 13% in the prior period.

Operational review

Third quarter revenues decreased from the prior period as a result of a continuous softening in seismic market demand. The increased competition from 3D vessels entering the 2D and source markets also impacted utilization.

Vessel utilization was 65%, down from 85% in the second quarter. Operational performance for the quarter remained strong, with the exception of the technical issues encountered by the Geo Pacific in West Africa. Technical downtime for the overall fleet was 3%, down from 6% for Q2. 

Contract surveys represented 35% of vessel capacity compared to 72% for the second quarter of 2014. Aquila Explorer completed two 2D surveys in Australia, while Osprey Explorer started a 2D survey in the Gulf of Mexico. Hawk Explorer completed a survey in the Middle East and remained off hire afterwards. Munin Explorer performed source operations in the North Sea during the period while Northern Explorer was idle. Geo Pacific commenced a new survey in Ghana at the end of the quarter. Voyager Explorer and Harrier Explorer worked nearly exclusively on multi-client surveys.

Multi-client sales increased significantly and represented 30% of vessel utilization for Q3 compared to 13% for Q2. Nearly half of the multi-client revenues related to prefunding for new surveys commenced in the period, which are in addition to partner contributions that are reported as a reduction in capitalized cost.  Remaining multi-client revenues related to prefunding for Geo Pacific's West African survey and late-sales from the existing multi-client library. An additional impairment of $0.6 million was charged to Geo Pacific's multi-client survey.