q4 2014 earnings release reports/quarterly... · 2020. 5. 13. · data being acquired orthogonal to...
Post on 26-Sep-2020
0 Views
Preview:
TRANSCRIPT
Robert Hobbs Kristian K. Johansen
Q4 2014 Earnings Release
CEO COO/CFO5 February 2015
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
All statements in this presentation other than statements of historical fact, are forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions that are difficult to predict and are based upon assumptions as to future events that may not prove accurate. These factors include TGS’ reliance on a cyclical industry and principal customers, TGS’ ability to continue to expand markets for licensing of data, and TGS’ ability to acquire and process data products at costs commensurate with profitability. Actual results may differ materially from those expected or projected in the forward-looking statements. TGS undertakes no responsibility or obligation to update or alter forward-looking statements for any reason.
Forward-Looking Statements
2
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Net revenues were a record 298 MUSD compared to 271 MUSD in Q4 2013 Net late sales of 226 MUSD, up 4% from 218 MUSD in Q4 2013 Net pre-funding revenues of 62 MUSD were up 44%, funding 49% of TGS’
operational multi-client investments for the quarter (126 MUSD) Operating profit for the quarter was 47 MUSD, 16% of net revenues, compared
to 120 MUSD (44% of net revenues) in Q4 2013 Q4 impairments of 63.9 MUSD related to the closure of Reservoir Solutions business
unit and fair value assessment of non-current assets Adjusted for the impairments, EBIT was 111 MUSD, 37% of net revenues in Q4 2014
Full year 2014 net revenues were 915 MUSD compared to 883 MUSD in 2013 Full year 2014 operating profit was 295 MUSD compared to 387 million in 2013 Two 3D vessels, three 2D vessels, one WAZ crew and four land crews operating
under TGS control in Q4 2014 TGS was also a participant in two 2D marine joint venture projects and one ocean
bottom seismic JV project
Q4 2014 Highlights
3
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved. 4
Operational Highlights
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Q4 2014 Operations
Sanco Sword 3D
Polarcus Adira 3D
CGG WAZ Crew
Akademik Shatskiy 2D
Sanco Spirit 2D JV
Atlantic Explorer 2D JV
Aquila Explorer 2D
Osprey Explorer 2D
Nessie FAN JV
Canada Crews
Ohio Crews
5
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
East Canada Newfoundland Labrador 2014 - 37,000 km multi-client
2D survey in partnership with PGS Extended acquisition season resulted in more than 20%
additional data being delivered Continuation of a multi-year program targeting Sectors
announced for Newfoundland Labrador’s new Scheduled Land Tender system
Complements TGS’ existing 47,500 km of 2D in this region
Data being acquired utilizing PGS’ Geostreamer® technology with data processing performed by TGS
Central Gulf of Mexico Snipe Phase 52 – 12,000 km multi-client 2D survey
Long offset, high resolution data in ultra deep water, extending to the U.S. – Mexico boundary
Supplements TGS’ existing library in the region and provides critical well ties to a number of recent discoveries
Q4 Activity – North America* In partnership with
6
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Central Gulf of Mexico Panfilo - 11,500 km2 multi-client 3D survey
commenced in Q4 2014 Deep water Lund and Henderson protraction areas
of Central Gulf of Mexico Survey covers mainly open acreage and targets
future lease rounds Declaration - 6,000 km2 multi-client M-WAZ survey
commenced in Q4 2014 Mississippi Canyon and Viosca Knoll protraction
areas of the Central Gulf of Mexico Data being acquired orthogonal to TGS' underlying
Justice WAZ 3D survey Long offsets to 16 km with single pass vessel
configuration derived from CGG’s StagSeisTM
technology Nessie FANTM - multi-client ocean bottom seismic
survey commenced in Q3 2014 Survey covers a number of existing fields and
exploratory acreage in the South Timbalierprotraction area of Central Gulf of Mexico
Part of multi-year collaboration agreement with FairfieldNodal
Q4 Activity – North America
7
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
New Zealand NWF14 - 17,500 km 2D multi-client survey
Within the Reinga, Northland and Taranaki basins, offshore Northwest New Zealand
Nine offshore permits granted to oil companies in Reinga-Northland, Taranaki, and the Pegasus basins as part of its 2014 block offer
Consultation process for 2015 block offer underway
Australia Nerites Season 2 – 13,000 km2 multi-client 3D
survey Second season of the Nerites 3D seismic survey to
fulfill work program commitment over EPP44 and EPP45 awarded November 2013
Prospective frontier acreage with block relinquishment expected in 2019
Solid prefunding but high amortization due to timing of relinquishments
Q4 Activity – Asia Pacific
8
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Greenland NE Greenland 2014 – 5,400 km multi-client
2D survey Part of a 13,500 km multi-year program Data being processed utilizing TGS’ proprietary
Clari-Fi™ broadband technology Upon completion of the program TGS’ 2D multi-
client library in the region will total more than 36,000 km
Q4 Activity – Greenland
9
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
U.S. Onshore Waterford – 295 km2 3D multi-client survey
Utica play, eastern Ohio Acquisition completed in Q4 2014
Freeport - 1,777 km2 3D multi-client survey Utica play, central Ohio Acquisition will complete in the second half of
2015 Loyal – 1,526 km2 3D multi-client survey
STACK play, Oklahoma Acquisition completed in Q4 2014
Canada Onshore Kaybob-Bigstone - 722 km2 3D-3C multi-client
survey Duvernay fairway, West Central Alberta Acquisition will complete in Q1 2015
Q4 Activity – North America Onshore
10
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Interpretive project in the Anadarko Basin available to clients end Q1 2015
Innovative approach to basin-wide multi-client interpretation to include: Formation tops derived from well data Data-driven temperature volume Pressure volume Total organic carbon (TOC) volume
Complements TGS multi-client seismic and well data
11 basins now covered by TGS interpretive projects
Enhancing Value through Technology
11
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved. 12
Financials
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
179
34
118
215 223
66
184131
0
50
100
150
200
250
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Cash Flow from Operations
56 43 43 44 74 60 51 62
127 155 138218 137 137 130
22629 12
9
10
11 8 9
9
050
100150200250300350
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Net Revenues
Prefunding Late sales Proprietary
211 210 191 271 222 205 190 298
89 9880
12094 82 71
111
0%
10%
20%
30%
40%
50%
020406080
100120140
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
EBIT before non-recurring items
EBIT EBIT Margin
126 110 11192
129 11493
126
0100200300400500600700800900
0
25
50
75
100
125
150
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Clo
sing
NB
V
Inve
stm
ent
Multi-client NBV and Investments (operational)
Investment NBV
Key Financials
13
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
NSA46%
Europe39%
AMEAP6%
Other9%
Q4 2013
NSA48%
Europe35%
AMEAP8%
Other9%
Q4 2014
Net Revenue Breakdown
2D24%
3D70%
GPS6%
Q4 2013
2D37%
3D57%
GPS6%
Q4 2014
14
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Q4 2014 Income Statement
USD million, except EPS Q4 2014 Q4 2013 Change in %Net operating revenues 298 271 10%Cost of goods sold – proprietary and other 1 2 -29%
Amortization of multi-client library 49% 143 107 33%
Gross margin 154 163 -5%Personnel costs 23 22 1%
Other operating expenses 24 14 76%
Cost of stock options 1 1 -9%
Impairment of Reservoir Solutions 54 -
Depreciation 5 5 -17%
Operating profit 16% 47 120 -61%Net financial items (12) (3) -330%Profit before taxes 12% 36 118 -70%Tax expense 4 34 -89%
Net Income 11% 32 84 -62%EPS, Undiluted 0.32 0.82 -61%
EPS, Fully Diluted 0.31 0.81 -62%
15
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Q4 2014 Cash Flow Statement
USD million Q4 2014 Q4 2013 Change in %Received payments 166 239 -30%Payments for operational expenses (35) (33) -6%
Paid taxes 0.4 9 95%
Operational cash flow 131 215 -39%Received payments from sale of tangible assets - 1
Investments in tangible and intangible assets (6) (3) -81%
Investments in multi-client library (117) (116) -1%
Interest received 1 2 -53%
Interest paid (0.5) (0.02) -2205%
Purchase of treasury shares (8) (5) -66%
Proceeds from share offerings 0.3 0.1 274%
Change in cash balance 1 94 -99%
16
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
YTD 2014 Income Statement
USD million, except EPS YTD 2014 YTD 2013 Change in %Net operating revenues 915 883 4%Cost of goods sold – proprietary and other 4 20 -80%
Amortization of multi-client library 45% 397 330 20%
Gross margin 514 534 -4%Personnel costs 88 81 9%
Other operating expenses 56 45 24%
Cost of stock options 5 4 13%
Impairment of the Reservoir Solutions net assets 54 -
Depreciation 16 16 0%
Operating profit 32% 295 387 -24%Net financial items (6) (6) -12%
Profit before taxes 32% 288 381 -24%Tax expense 72 112 -36%
Net Income 24% 216 269 -20%EPS, Undiluted 2.12 2.63 -19%
EPS, Fully Diluted 2.09 2.59 -19%
17
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
YTD 2014 Cash Flow Statement
USD million YTD 2014 YTD 2013 Change in %Received payments 859 812 6%Payments for operational expenses (140) (145) 4%
Paid taxes (114) (124) 8%
Operational cash flow 605 543 11%Received payments from sale of tangible assets - 1 -100%
Investments in tangible and intangible assets (27) (39) 31%
Investments in multi-client library (437) (422) -3%
Proceeds from sale of short-term investments 5 - N/A
Interest received 6 7 -15%
Interest paid (0.8) (3) 77%
Dividend payments (145) (142) -2%
Purchase of own shares (24) (5) -384%
Proceeds from share offerings 3 3 14%
Change in cash balance (15) (59) -76%
18
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Balance Sheet
The Company holds no interest-bearing debtThe Company holds no interest-bearing debt
USD million Q4 2014 Q3 2014 Change in % Q4 2013AssetsCash equivalents 256 264 -3% 281Financial investments available for sale - - 4Other current assets 521 365 43% 447Total current assets 778 629 24% 731Intangible assets and deferred tax asset 85 137 -38% 138Other non-current assets 44 53 -18% 56Multi-client library 818 837 -2% 758Fixed assets 43 53 -18% 53Total Assets 1,768 1,710 3% 1,736LiabilitiesCurrent liabilities 393 317 24% 342Non-current liabilities 7 19 -63% 17Deferred tax liability 29 56 -49% 85Total Liabilities 428 392 9% 443Equity 1,339 1,318 2% 1,293Total Liabilities and Equity 1,768 1,710 3% 1,736
19
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
299
153
270
381
609
419
0
100
200
300
400
500
600
700
2010 2011 2012 2013 2014 WIPOriginal investments Maximum allowed NBV (year-end) Net Book Value
100%
40%
4%
100%
20% 8%
60%
63%
52%
32%
0%
Investments per Vintage
20
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
63%
8%
11%
1%
7%8%
23%
41%
0% 0%1%
3%
17%
43%
36%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
pre-2010 2010 2011 2012 2013 2014 WIP
Net revenues Net book value
Net Revenues vs. Net Book Value per Vintage
21
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Strong Cash Generation Delivers Shareholder Value
The Board proposes a dividend of NOK 8.5 per share to the AGM in May 2015
In addition to a dividend, the Board authorized in 2014 a share buy back program of USD 30 million of which approximately USD 26 million has been implemented to date. The remaining USD 4 million will be purchased under the current authorization.
* Dividend yield calculated based on share price at day of announcement except for 2014 when share price was based on January 6, 2015 close
* The OSX Index (PHLX Oil Service Sector Index) is a price weighted index composed of companies involved in the oil services sector
22
Dividend per Share (NOK) and Dividend Yield* 2015 Dividend Yield vs OSX Index*18.2%
10.1%
5.3%4.4%
3.3% 3.0%2.1% 2.0% 1.9% 1.9% 1.8% 1.7% 1.2%
n/a n/a n/a
4
5
6
88.5 8.5
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
0
1
2
3
4
5
6
7
8
9
2009 2010 2011 2012 2013 2014
Dividend NOK Dividend yield
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved. 23
Outlook
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Macro Outlook Recent oil price development to result in decreased exploration spend from
customers
EUR Norwegian 23rd Licensing Round bids due 2 December 2015 Further CSEM investment in partnership with EMGS 2015 season of Greenland 13,500 km multi-year program to commence in Q3
NSA BOEM five-year plan (2017-2022) proposal includes 10 lease sales in GOM
and one Atlantic lease sale TGS positioning for high GOM lease turnover 2017 - 2019 Continued strong interest in Newfoundland Labrador’s scheduled land tender
system Vessels secured for entry into Mexico (subject to permit) Three onshore projects announced for 2015
AMEAP 13,000 km2 Nerites Season 2 expected to complete in Q2 2015 17,500 km 2D multi-client survey in Northwest New Zealand to complete in Q2
2015 Awaiting further Africa license round announcements
Outlook
24
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
License Round Activity and TGS Positioning
25
Europe / Russia• Norway APA – 2014 Round awards
announced in Q1 2015• Norway 23rd Round – 2H 2015 (bids due)• United Kingdom – 2016 (expected)• Greenland – three rounds planned 2016-18
Africa, Middle East, Asia Pacific• Madagascar – 2015 (expected)• Sierra Leone – 2015 (expected)• Liberia Harper Basin - 2015 (expected)• Australia – Feb 2015 & Apr 2015 (bids due)• Indonesia – 2015 (expected)• New Zealand – Sept 2015 (bids due)
North & South America • Central GOM – Mar 2015 (5-Year Plan)• Western GOM – Aug 2015 (5-Year Plan)• Alaska Offshore - 2016 & 2017 (5-Year Plan)• Newfoundland & Labrador – Scheduled Land Tenure system• Nova Scotia – 2015, 2016 & 2017 (3-Year Plan)• Canada Onshore – at least monthly• Brazil - 2015 (expected)• Mexico – 2015 (Round 1 phased across 2015)
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Backlog
110 124 134
242188
153 146185 178
213 224260
211
143
281 293
0
50
100
150
200
250
300
350
Q12011
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Historical Backlog (MUSD) 2011 - 2014
26
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Letter of Award with Seabird Exploration provides access to up to six seismic vessels over a period of approximately 36 months in Mexico and US Atlantic waters (subject to issuance of seismic acquisition permits from relevant authorities)
2015 Projects ScheduleJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sanco Swift
Sanco Sword
Polarcus Adira
CGG StagSeisTM Crew
AustraliaAustralia
Akademik Shatskiy
Atlantic Guardian (CSEM)
Aquila Explorer
Osprey Explorer
PGS JV
Canada Crew
Ohio Crews (2)
Oklahoma Crew
AustraliaAustralia
FreeportFreeport
NW Eur EMGS JVNW Eur EMGS JV
GreenlandGreenland
New ZealandNew Zealand
Gulf of MexicoGulf of Mexico
Ogo FAN
Nessie FAN
Gulf of Mexico JVGulf of Mexico JV
Gulf of MexicoGulf of Mexico3D &
WAZ
OB
N2D
& O
ther
Land
Cre
w Kaybob-BigstoneKaybob-Bigstone
Gulf of MexicoGulf of Mexico
BlanchardBlanchard
Gulf of MexicoGulf of Mexico
Canada (provisional, to be confirmed)Canada (provisional, to be confirmed)
EURAMEAP
NSA
27
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
Summary
Record Q4 net revenues of 298 MUSD with highest ever net late sales of 226 MUSD
Full year 2014 Guidance achieved with net revenues of 915 MUSD Full year 2014 investment of 462 MUSD Recent oil price development to result in decreased exploration spend from
customers However, long-term future of asset-light, focused multi-client business remains
strong and TGS has record high backlog entering into 2015
Guidance for 2015 TGS expects multi-client investments of approximately 420 MUSD and additional Capex of 15 MUSD
TGS targets revenues of approximately 750 MUSD
TGS targets an EBIT of approximately 260 MUSD
The Board will propose to the AGM in May a dividend of NOK 8.5 per share
28
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
0%
10%
20%
30%
40%
50%
60%
70%
80%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
ROCE WACC
Average EBIT margin above 40% - stable EBIT – performance through the cycles
ROCE significantly above WACC – substantial value creation in any industry cycle
*Peer group includes CGG, Geokinetics, ION Geophysical, PGS, Western Geco, Dolphin, Polarcus Source Platou Markets and TGS
EBIT margin vs. Seismic peers Return on Capital Employed
TGS Performs in all Cycles
29
Thank you
©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.
www.tgs.com
top related