1
Annual Report 2022
Seabird Exploration Plc
Annual report
2022
Financial highlights for the Group
3
Letter from the Chairman
4
Group Management
5
Board of Directors
6
Environmental, social and corporate governance
7
Management Report
16
Consolidated Financial Accounts
21
Separate Financial Accounts: Seabird Exploration Plc
66
Independent Auditors’ Report
81
Declaration of the Members of the Board of Directors
89
3
Annual Report 2022
Financial highlights for the Group
Year ended 31 December
All figures in USD 000's
2022
2021
Revenues
20,164
20,705
Cost of sales
-19,036
-21,013
SG&A
-3,889
-5,563
EBITDA*
-1,276
-4,185
EBIT*
-9,617
-11,779
Profit/(loss) continuing operations
-11,605
-11,425
Profit/(loss) for the period including discontinued operations
-12,861
-11,425
Capital expenditures
3,895
20,961
Total debt
16,287
15,327
Net interest-bearing debt*
15,435
13,015
Equity ratio*
45%
41%
Note* see group note 33 for definitions
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Annual Report 2022
Letter from the Chairman
The spin-off of Green Minerals marked the final leg in the
restructuring of the Group and with this we are excited to bring
the seismic business in SeaBird Exploration back to the market in
its pure form. Through the restructuring, we firmly believe we
have right-sized the cost level, high-graded our capacity to
industry-leading standards, amended our operating model to
enable excellence in the product we deliver and rearranged
into an appropriate funding structure. We are pleased to see
these efforts finally beginning to show in the Group`s numbers.
The main challenges now are linked to capital allocation and
optimization of the Company’s capacity in order to be of the
greatest use for our clients while at the same time delivering to
our shareholders. In doing so, we are fortunate in that the
underlying market conditions are continuing to improve,
thereby creating a larger opportunity set for the Company.
Rates for OBN source work have almost doubled already and
rates for streamer work are moving up steadily, too. Having
flipped the Company`s operational leverage substantially in our
favour the last three years. SeaBird is well positioned to take
advantage of an improving market. SeaBird`s position in two of
the segments with the largest exposure to more in- and near-
field exploration and emerging market energy security, bodes
well for the future.
Admittedly, while being a public company has many
advantages, it can also create some constraints depending on
how our equity is priced in the marketplace. Being a private
company may therefore have accelerated some of the
opportunities the Company is facing. We continue to be strong
advocates for the need for further consolidation in our industry,
and believe recent trends support our argument.
Notwithstanding this, we are confident that SeaBird Exploration
following the restructuring is well positioned to take advantage
of current trends in the energy markets. Recent industry-leading
contract awards testifies to this. And we have both organization
and equipment to do more in a market that is improving.
In an underfollowed and under analysed company like Seabird
we do feel some responsibility for guiding our shareholders on
certain metrics that we feel are poorly understood in the
marketplace. One such was our guiding on the OBN market
back in March 2022. We have updated this guidance in our Q4
presentation and see continued improvement ahead. The
market is in our opinion tighter than it was at the last peak in
2014, but rates have failed to recover to previous highs of
around USD 80,000 per day. This inertia in market pricing is in our
opinion due to project economics that takes some time to work
themselves through. We are confident that rates need to
improve, though, as seismic equipment & vessel economics are
far from where they need to be to give an adequate return on
the investments made. Considering the extended downturn
from 2014, vessel economics need to overshoot the “average”
profitability just to catch up. Indeed, looking at the more than
50% reduction in vessel supply in the segments relevant to
SeaBird and no newbuild orders in sight, the 60% or so growth in
OBN demand over the same period implies that something has
to give. That something is usually day rates.
As cash flow is improving we have stated that our main focus is
to pay down debt. And indeed, over the last 9 months the
Company has paid down 42pc of its bank debt. As such, the
Company should soon be in a position to start returning cash to
shareholders through dividends and/or buybacks.
The Company continuously monitors opportunities that can
support profitable growth under the constraints mentioned
above.
Last but not least I`d like to take this opportunity to thank
everyone at SeaBird for their terrific effort over these memorable
past few months. Let`s keep up the good work!
Thank you!
Sincerely,
Ståle Rodahl
Executive Chairman
SeaBird Exploration & Green Minerals
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Annual Report 2022
Group Management
Finn Atle Hamre – Chief Executive Officer.
Position held from 2021.
Mr. Hamre has held the position
as Chief Operating Officer of the
company since June 2018,
before taking over as CEO in
2021. Mr. Hamre has more than
25 years of experience in the
Offshore Oil and Gas industry
across both European and Asian
markets. He has more than 15
years of experience in senior
executive management
positions including VP, MD, CCO and CFO. He holds a B.Eng.
(Hons) in Naval Architecture, and a Master of Business
Administration.
Sveinung Alvestad – Interim Chief Financial Officer.
Position held from 2022.
Mr. Alvestad has joined the
company as Director M&A in May
2021 and appointed CFO
(Interim) in August 2022. He has
worked in investment banking for
about 10 years, with a special
focus on research on renewables
and energy markets and
companies. He holds a MSc in
Industrial Economics and
Technology Management from
the Norwegian University of Science and Technology (NTNU) in
Trondheim. His engineering specialization is within electrical
energy while the economics specialization is in investment,
finance and financial management.
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Annual Report 2022
Board of Directors
Ståle Rodahl – Executive Chairman of the board
Ståle Rodahl has served
30 years in the financial
industry, amongst others
as a hedge fund
manager and in various
executive positions in the
Investment Banking
industry in New York,
London and Oslo and in
companies such as
Alfred Berg, ABN Amro
and ABG Sundal Collier.
He has also served on the Board of Directors in companies in
other industries. Mr. Rodahl holds a MSc with a major in Finance
from the Norwegian Business School, BI with additional programs
from London School of Economics (LSE) and NASD, New York.
Øivind Dahl-Stamnes – Director
Øivind Dahl-Stamnes has
worked 36 years in the
petroleum industry in
Norway and
internationally. He has
held
executive/management
positions in Equinor and
Esso/Exxon for more than
15 years within
exploration and
production operations. Recent assignments in Equinor include
Vice President positions for the Troll field, the North Area Initiative
and Partner Operated Licenses. He has also served as chairman
and member of numerous Production License Management
Committees for Equinor and Esso. Mr. Dahl-Stamnes holds a
master’s degree in geology from NTNU in Trondheim.
Nicholas Knag Nunn – Director
Nicholas Nunn has a degree as a chartered accountant from
Norges Handelshøyskole and an MSc in International Business
and Finance from the University of Reading. Mr. Nunn has work
experience from Deloitte, Kristian Gerhard Jebsen Skipsrederi
and Europa Link.
Hans Christian Anderson – Director
Hans Christian Anderson works as a portfolio manager for one of
the company’s largest shareholders, Anderson Invest AS. He
founded his first company when he was 18 years old and has a
broad, international background as an investor in multiple
industries. Mr. Anderson also serves on the board of directors of
other companies.
Odd Sondre Svalastog Helsing – Director
Mr. Helsing currently holds the position as investment manager
at MH Capital AS, the Company’s largest shareholder. Mr
Helsing has worked more than 11 years in finance and prior to
joining MH Capital AS held the position as Co-Head of Equity
and Sales at Clarksons Platou Securities. Mr. Helsing holds a
bachelor’s in economics and Business Administration from
Norwegian School of Economics (NHH). He is a Norwegian
citizen and resides in Norway.