Magseis reports strongest quarter in its historyCompany News // February 24, 2017
Ocean Bottom Seismic (OBS) specialist Magseis has reported the strongest quarter in its history with all-time high high revenues and EBITDA. The quarter saw it awarded a contract by ConocoPhilips for a 4D seabed seismic survey in the North Sea. Production is progressing according to plan together with BGP on Saudi Aramco's S-78 project.
The company had revenue of US$20.0 million (US$5.5 million in the same period in 2015). It reported EBITDA of US$5.5 million (US$ -6.3 million in 2015), EBIT of US$1.9 million (US$-10.8 million in 2015) and net income of US$0.1 million (US$-11.2 million in 2015).
Idar Horstad, the company's CEO, said: "The fourth quarter of 2016 represents the first full quarter of production from our ongoing operations in the Red Sea. During the period, production efficiency has steadily increased and the
financial results highlight the outlook for 2017 and provide a solid baseline for further growth.
"This caps a year during which Magseis has made great progress towards our goal of becoming the industry's leading provider of OBS data. We have conducted continuous multi-vessel operations, operated a rolling spread of more than 4,000 nodes and provided seamless operations in areas with unparalleled variations in water depth, seabed topography and climatic conditions.
"When challenges have arisen we have shown that we can address them quickly and, as a result, we are more confident than ever in the technical capability, efficiency and robustness of our system.
"Our operational performance has continued into 2017, making it likely that the ongoing project will be completed on time. Based on feedback from our client we are confident that the activity in the Red Sea will continue throughout 2017 and are excited by the potential in this region in the years ahead."
In December, Magseis secured a first contract for ConocoPhillips for a 4D monitoring survey in the North Sea.
"This is a milestone for the company as we will start to operate two crews and a major step in our strategy to 'work smarter together with our clients' in order to reduce the cost of OBS data. The operation will comprise of 3,000
new nodes deployed by a third party ROV vessel to be chartered on per project basis, while all node handling will be performed onshore in a mobile containerized setup. The crew will require a limited increase in staff and the required equipment is already in production. We believe this offering holds great potential to make regular reservoir monitoring affordable for a wide range of fields and we are currently pursuing several options for additional awards
during 2017 and 2018.
"As we have highlighted over the past few quarters, tender activity in the OBS segment has increased significantly and awards for 2017 already suggest a year-on-year increase of more than 50 per cent from 2016 levels. Our industry leading technology and strong operating track record places Magseis in a unique position to capture a substantial share of the expected market growth.
"The company is currently limited by its crew and node capacity and has therefore engaged ABG Sundal Collier and Arctic Securities as financial advisors to advise on the financing of additional capacity in order to expand our reach and ability to take on more projects."