EX-99.2 3 v368110_ex99-2.htm EX-99.2

 

Exhibit 99.2

 

NASDAQ: SAEX FORT LAUDERDALE, FL IPAA OGIS FLORIDA CONFERENCE

 
 

This presentation includes certain forward - looking statements, including statements regarding future financial performance, future growth and future acquisitions . These statements are based on SAE’s current expectations or beliefs and are subject to uncertainty and changes in circumstances . Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors, and other risks and uncertainties affecting the operation of SAE’s business . These risks, uncertainties and contingencies include : fluctuations in the levels of exploration and development activity in the oil and gas industry ; intense industry competition ; a limited number of customers ; the need to manage rapid growth ; delays , reductions or cancellations of service contracts ; operational disruptions due to seasonality, weather or other external factors ; crew productivity ; the availability of capital resources ; substantial international business exposing SAE to currency fluctuations and global factors, including economic, political and military uncertainties ; the need to comply with diverse and complex laws and regulations ; and other factors set forth in SAE’s filings with the Securities and Exchange Commission . The information set forth herein should be read in light of such risks . Except as required by law, SAE is not under any obligation to, and expressly disclaims any obligation to, update or alter its forward - looking statements, whether as a result of new information, future events, changes in assumptions or otherwise . Safe Harbor 2 NASDAQ: SAEX

 
 

History and Experience Founded in 2006 in Peru Rapid organic growth through international expansion and customer retention Executive management with an average of 30 + years of seismic experience each Top - Tier Customers Reduce customer exploration risks with dedication to safety and efficiency Utilize expertise in logistics to provide a full range of 2 D, 3 D and 4 D land and shallow water marine seismic services in geographically complex and challenging regions No speculative shooting – 100 % of revenue is fully - funded and contracted Strategy and Purpose Focus on North America, South America, Africa and Southeast Asia ~ 84 % of YTD revenue through the end of Q 3 2013 was earned outside of the U . S . Operations in some of the most prolific oil producing regions of the world Global Leverage Majority of clients are tenured, well established IOCs and NOCs Average relationship 5 - 6 years Growing Backlog Backlog of $ 292 million as of December 31 , 2013 $ 475 million of total bids outstanding, with $ 115 million in N . Africa and Brazil Company Overview 3 NASDAQ: SAEX

 
 

Full Service Logistics and Seismic Provider 4 NASDAQ: SAEX Program Design Planning & Permitting Camp Services & Infrastructure Survey & Line Cutting Drilling Recording & Processing On average, approximately 80% of SAE’s revenues are earned through high - margin logistics - related activities performed in - house Typical Project Characteristics Program design and planning usually starts up to a year in advance On average, projects tend to last 3 – 6 months in duration, but can last multiple years Crew size is often up to 3,000 skilled laborers hired from local communities Ability to increase and control efficiencies with logistical services, as opposed to commoditized recording and processing activities Less susceptible to cancellation due to long - term nature of very expensive development programs, compared to more volatile, commodity - price driven short - term projects typical of the Lower 48

 
 

International Leverage 5 NASDAQ: SAEX SAE was built on the expertise and ability to operate in the most geographically complex and logistically challenging resource - producing regions of the world Very large reservoirs in relatively unexplored regions R elationships and expertise necessary to work with local governments and communities Recently awarded first project in Brazil Significant market share in Peru and Colombia with Brazil holding most near - term growth potential SOUTH AMERICA NAM is a mature 3D market Substantial market share in Alaska with major operations in Cook Inlet and North Slope Awarded 3 new projects in Alaska during Q4 2013 Stabilized operations in Canada for last two years NORTH AMERICA Large untapped market Projects are logistically complex and fit well within SAE’s niche Extensive opportunities in Ethiopia and Chad with new and prior customers Currently have more than $92 million in bids outstanding NORTH AFRICA Tremendous shallow - water marine opportunities Recently completed complex shallow - water project in Malaysia Actively working with long standing customers on new bids SOUTHEAST ASIA Expansion Markets

 
 

16% < 4% 80% 3 - 5% 12% 8% 40% 7 - 10% 25 - 30% $723 billion market $18 - 21 billion market Exploration Geophysics Development Data Library Sales Data Processing Land Equipment Land Acquisition Services Marine Equipment Marine Acquisition Services Market Opportunity 6 NASDAQ: SAEX Historical E&P Capex vs. Production Oil is becoming increasingly difficult and expensive to find Global E&P capex in 2014 is projected to reach $ 723 billion, of which $ 18 - 21 billion represents anticipated seismic spending The land acquisition services segment of the seismic market is estimated to account for between $ 5 to $ 6 billion of total E&P capex Source: Barclays 2014 Annual E&P Spending Survey; Management’s estimates Projected 2014 Global E&P Capex

 
 

Strategic Positioning 7 NASDAQ: SAEX Source: Barclays 2014 Annual E&P Spending Survey; BP Statistical Review June 2013 2014 Global E&P Spending by Region SAE strategically targets specific markets based on logistical complexity and client relationships SAE’s international markets account for over $ 400 billion of projected E&P spending and more than 44 % of the world’s oil reserves IOCs and NOCs have led the charge, enabling SAE to prosper from sound market positioning 2014 Est. E&P Spend = $723 billion YE 2012 Global Proved Oil Reserves 22% 78% U.S. Domestic International 22% 78% U.S. Domestic International 2014 Est . International E&P Spend = $567 billion

 
 

When adjusted to reflect the removal of $ 114 million in paused revenue since Q 4 2012 , the resulting growth in backlog is over 158 % from $ 113 million at YE 2012 to $ 292 million at YE 2013 Smaller tack - on projects are taken with little notice in an effort to maintain optimal crew utilization and smooth out short - term delays and may not be reflected in the backlog Strength In Backlog 8 NASDAQ: SAEX Historical Backlog with Adjusted Growth (1) Contracted Backlog = $292 million Current Backlog and Bids Outstanding Backlog Realization Expectations Backlog $292 million Bids O/S $475 million (1) Historical backlog retroactively adjusted to reflect resulting growth apart from $114 million of paused revenue in Alaska da ting back to Q4 2012 that was removed during Q4 2013 Note: Backlog only consists of committed work secured through a signed contract or letter of intent $114m of paused revenue removed from backlog

 
 

Capital Expenditures 9 NASDAQ: SAEX Capital Expenditures During 2011 and 2012 , SAE invested over $ 65 million in new equipment, transforming its equipment profile from mostly rental to 50 % ownership, with the goal of increasing profitability No future capex required to fulfill current contracted backlog Current equipment is mostly new with limited maintenance capex required SAE will consider additional capex investments on a case - by - case basis ; available liquidity will only be utilized when expected to be accretive to earnings 2 - year capex program to increase return on equipment and lower rental expense

 
 

Financial Summary 10 NASDAQ: SAEX Revenue and Gross Margin (1) Modified EBITDA and Margins Balance Sheet Summary 2012 revenue included large third - party fees First 9 M 2013 were impacted by multiple delays , including the further delay of a large previously paused project in Alaska and mechanical issues on a shallow - water project in Malaysia Also impacting the first 9 months of 2013 was an early Q 3 project in Canada that, due to seasonal pricing pressure, had lower margins than is typical of SAE’s winter operations in the region (1) Excludes direct operating expenses, including depreciation of $3.3 million, $3.8 million, $11.4 million and $10.4 million in FY 2010, 2011 and 2012 and first 9M 2013, respectively

 
 

Quality, Health, Safety & Environment (“QHSE”) 11 NASDAQ: SAEX Historical Lost - Time Injury (LTIF) & Total Recordable Case (TRCF) Frequencies vs OGP Targets SAE maintains an industry - leading quality, health, safety and environmental program Internal QHSE requirements are more stringent than industry standards, despite operating in some of the harshest environments in the world Recently announced a key milestone achievement of over 15 million exposure hours, or more than 490 consecutive days, without incurring a single lost - time injury

 
 

Positive Progress 12 NASDAQ: SAEX Future Expectations Expect to return to profitability in Q 4 2013 Multiple avenues for continued organic growth – market share growth + overall market growth Ability to increase margins by capturing additional efficiencies, notably within logistical services Resilient Backlog New Project Awards During Q 4 2013 , SAE announced a total of five new project awards – three in Alaska and two in South America – aggregately valued at $ 192 million Recently awarded first project in Brazil ; expected to start in Q 2 2014 E xpectation of first project award in Africa during 2014 Actively bidding numerous shallow - water marine opportunities with long - standing customers in SE Asia Warrant Exchange Recently completed exchange offer of one common share for ten warrants in an effort to simplify capital structure and reduce overhang Approximately 14 . 4 million warrants were tendered, or roughly 96 % of all outstanding warrants, resulting in approximately 1 . 4 million new shares Contracted backlog of $ 292 million as of December 31 , 2013 , an 11 % increase over Q 3 2013 backlog of $ 264 million $ 475 million of bids outstanding, with $ 115 million in Africa and Brazil alone Resiliency in backlog and business development efforts is reflected by ability to capture new opportunities quickly

 
 

Investor Contact Ryan Abney Vice President, Capital Markets and Investor Relations (281) 258 - 4409 rabney@saexploration.com Contacts 13 NASDAQ: SAEX SAE Canada 3333 8th Street SE, 3rd Floor Calgary, AB T2G 3A4 O : (403) 776 - 1950 SAE Alaska 8240 Sandlewood Pl, Suite 102 Anchorage, AK 99507 O : (907) 522 - 4499 SAE Houston 1160 Dairy Ashford, Suite 160 Houston, TX 77079 O : (281) 258 - 4400 SAE Peru Francisco Masias 544, Of 301 San Isidro, Lima 27 O : (511) 221 - 5209 SAE Colombia Calle 93 No 14 - 20, Of 709 Bogota , Colombia O : (571) 593 - 6800 SAE Bolivia Av. Iberica , Calle 3 Oeste No 11 Barrio Las Palmas, Bolivia O : (591) 3 358 - 7575 SAE Brazil Av. Almirante Barroso No 02, 6th Fl Rio de Janeiro, Centro 20031 - 001 O : (55) 21 3553 - 5104 SAE Malaysia Suite 22.01A, Level 22 Menara Citibank 165, Jalan Ampang 50450 Kuala Lumpur SAE Australia 6/33 Pembroke Street Carina, Brisbane Queensland 4152 O : (61) 7 3194 - 2491 SAE New Zealand 9 Swans Rd , Bell Block 4315 Taranaki , New Zealand O : (64) 06 755 - 4485

 
 

Appendix

 
 

Executive Management 15 NASDAQ: SAEX Jeff Hastings Executive Chairman Brian Beatty President and CEO Brent Whiteley CFO and GC President and owner of Fairweather Geophysical, which successfully maintained significant market share of Alaskan seismic market during each year of operation Following the acquisition of Fairweather by Veritas DGC in 2000 , Mr . Hastings retained his role as head of the Alaskan Division for Veritas and then CGGVeritas following its acquisition of Veritas DGC Mr . Hastings was instrumental in assisting SAE in successfully expanding its operations into Alaska’s Cook Inlet and North Slope Years Experience 35+ Founded SAE in 2006 after establishing and maintaining Veritas DGC’s South American operations, where he ran operations for over 15 years Began career in seismic field management in 1980 with Veritas DGC Successfully led SAE’s expansion into Canada through its acquisition of Datum Exploration Joined SAE in 2011 as Chief Operating Officer and General Counsel, later transitioning to the role of Chief Financial Officer and General Counsel Following more than 10 years in private law, Mr . Whiteley joined Veritas DGC as its Assistant General Counsel . After earning his MBA in 2006 , Mr . Whiteley assumed the role of Senior Vice President in charge of all operations for CGGVeritas ’ Land Acquisition business in the Americas 30+ 20+

 
 

(1) Excludes $ 213 thousand of amortization of loan issuance costs which are included in depreciation and amortization for the fiscal year ending December 31 , 2012 (2) Principally deferred financing costs and early payment fee in connection with the retirement of certain outstanding indebtedness (3) Costs related to contemplated acquisitions (4) Excludes $ 1 , 385 thousand and $ 2 , 447 thousand of amortization of loan issuance costs which are included in depreciation and amortization in the three and nine month periods ended September 30 , 2013 (5) Principally third - party financing costs, costs associated with the merger of SAE and Trio, and one - time severance costs related to the reduction of staff in Colombia Note : Modified EBITDA (arrived at by taking earnings before interest, taxes, depreciation and amortization, and non - recurring expenses) is not derived in accordance with generally accepted accounting principles (“GAAP”) . EBITDA is a key metric SAE uses in evaluating its financial performance . EBITDA is considered a non - GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933 , as amended . SAE considers EBITDA important in evaluating its financial performance on a consistent basis across various periods . Due to the significance of non - cash and non - recurring items, EBITDA enables SAE’s Board of Directors and management to monitor and evaluate the business on a consistent basis . SAE uses EBITDA as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions regarding future operating investments and potential acquisitions . The presentation of EBITDA should not be construed as an inference that SAE’s future results will be unaffected by unusual or non - recurring items or by non - cash items, such as non - cash compensation . EBITDA should be considered in addition to, rather than as a substitute for, pre - tax income, net income and cash flows from operating activities . EBITDA Reconciliation 16 NASDAQ: SAEX

 
 

Unique Perspectives 17 NASDAQ: SAEX

 
 

Unique Perspectives (cont’d) 18 NASDAQ: SAEX

 
 

Unique Perspectives (cont’d) 19 NASDAQ: SAEX

 
 

Unique Perspectives (cont’d) 20 NASDAQ: SAEX

 
 

Unique Perspectives (cont’d) 21 NASDAQ: SAEX