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
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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.
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Annual Report 2022
Environmental, social and corporate governance
1.1 Sustainability governance
Sustainability governance in shipping is a critical aspect of
ensuring that the shipping industry operates in a responsible and
sustainable manner. With the increasing awareness of
environmental and social issues, there is a growing need to
address the impact of shipping activities on the environment
and the communities that depend on it.
One key aspect of sustainability governance in shipping is the
development and implementation of international regulations
by organizations such as the International Maritime Organization
(IMO). These regulations are designed to reduce the
environmental impact of shipping activities by setting standards
for the prevention of pollution and the reduction of greenhouse
gas emissions. Examples of such regulations include the
International Convention for the Prevention of Pollution from
Ships (MARPOL) and the Energy Efficiency Design Index (EEDI).
In addition to international regulations, market-based
mechanisms can also play a role in promoting sustainability in
shipping. These mechanisms include sustainability indices,
sustainability-linked loans, and other financial instruments that
incentivize environmentally friendly behavior. Shipping
companies can also play a critical role in promoting
sustainability by integrating sustainable practices into their
business operations, developing sustainability policies, and
reporting on their environmental, social, and governance (ESG)
performance.
Engagement with stakeholders is another critical aspect of
sustainability governance in shipping. Shipping companies can
work with customers, suppliers, governments, and NGOs to
understand their sustainability needs and expectations and to
collaborate on sustainable initiatives. Stakeholder engagement
can also help shipping companies to build trust and support
among their stakeholders, which can be critical for long-term
sustainability.
Overall, sustainability governance in shipping is a multi-
stakeholder process that involves collaboration among shipping
companies, international organizations, governments, and
other stakeholders. By working together, these stakeholders can
promote sustainable development in the shipping industry and
manage the interactions between shipping activities and the
environment, ensuring that the industry operates in a responsible
and sustainable manner.
SeaBird Exploration recognises that the shipping industry carries
inherent risks related to pollution, spills, health and safety, and
corruption. As such, we have implemented strong policies and
effective controls to manage these risks in our day-to-day
operations, and to ensure compliance with all relevant
international and local laws and regulations. These policies and
processes serve as guidelines for our employees and partners.
The oversight of SeaBird Exploration's Environmental, Social, and
Governance (ESG) policy is the responsibility of the Board of
Directors (BoD). In accordance with the Norwegian Corporate
Governance Code, the BoD considers important ESG issues
throughout the year and ensures that sufficient and efficient
ESG-related internal control and risk management mechanisms
are in place. The BoD also reviews our Code of Conduct and
corporate governance structure annually, and oversees the
review of our annual ESG report.
The Chief Executive Officer (CEO) is responsible for all SeaBird
Exploration operations, with our Technical Managers on the front
line to handle incidents. We conduct regular training throughout
the year to ensure our team is trained to carry out their job in a
vigilant and safe manner. Our crew is required to adhere to
defined guidelines to guide them in performing their daily duties,
with continuous monitoring on our ships to allow for
management follow-up if necessary. We also review findings
and concerns related to internal controls and enforcement, with
all events reported to the board of directors in an annual review.
Cases with a significant impact are reported directly to the
Board of Directors, in line with our Code of Conduct.
At SeaBird Exploration, we acknowledge the importance of
addressing sustainability in a broader context, and have listed
the United Nations' Sustainable Development Goals (SDGs) as
part of our commitment to contributing to the broader global
agenda. We believe that we can have a positive, negative, or
neutral impact on the achievement of the SDGs, and are
committed to working with our industry, customers, suppliers,
investors, and regulators to ensure that we are making a positive
contribution towards achieving these goals.
Material issue
International standards
and references
Climate
change
The Paris Agreement
The Intergovernmental
Panel on Climate
Change (IPCC)
Initial IMO Strategy on
Reduction of GHG
Emissions from Ships
Air emissions
IMO MARPOL
Convention Annex VI
EU Sulphur Directive
2016/802
Ecological
impact
UN Global Compact
IMO MARPOL
Convention Annex VI
IMO Ballast Water
Management
Convention
Hong Kong Convention
Anti-
corruption
UN Global Compact
The US Foreign Corrupt
Practices Act and the
UK Bribery Act
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Annual Report 2022
Employee
health and
safety
Company’s
Code of
Conduct
HSE policy
SeaBird
Exploration KPIs
UN Global Compact
ILO Conventions
Maritime Labour
Convention, 2006
International
Management Code for
the Safe Operation of
Ships and for Pollution
Prevention (ISM Code)
Hong Kong Convention
Marine Crew Resource
Management
Accident
and safety
management
Safety
management
system
International
Management Code for
the Safe Operation of
Ships and for Pollution
Prevention (ISM Code)
Marine Crew Resource
Management
1.2 Our approach to ESG and their
integration into our strategy
SeaBird Exploration is a global provider of high-quality marine
seismic data. As a company, we acknowledge the importance
of Environmental, Social, and Governance (ESG) factors in our
operations and strive to ensure that our activities align with best
practices in these areas.
This ESG report provides an overview of SeaBird Exploration's
performance in the areas of environmental sustainability, social
responsibility, and corporate governance. The report covers the
period from January 1, 2022, to December 31, 2022, and
includes data from our operations in all the regions in which we
operate.
Our commitment to ESG is rooted in our belief that responsible
business practices not only benefit our stakeholders, but they
also contribute to the long-term sustainability of our business. Our
goal is to create value for our shareholders while also minimising
our impact on the environment and contributing positively to
the communities in which we operate.
In this report, we have adopted a transparent and data-driven
approach to provide a comprehensive overview of our ESG
performance. We have used a range of internal and external
data sources to evaluate our performance against relevant
industry benchmarks and standards.
Our commitment to ESG is reflected in our strategy, policies, and
operations, and we believe that this report demonstrates our
progress towards achieving our ESG goals. We recognise that
there is always room for improvement, and we remain
committed to ongoing efforts to enhance our ESG performance
in the years to come.
We invite our stakeholders to review this report and engage with
us on our ESG journey as we continue to work towards building
a sustainable future for our business and the broader
community.
These are the areas where we concentrate our efforts:
• Ensuring the safety of our personnel
• Establishing a profitable and sustainable business
• Upholding good governance and adherence to
regulations
• Preserving the environment
The UN introduced the Sustainable Development Goals (SDGs)
in 2015. As we enter a decade of action to achieve these goals
by 2030, our Sustainability Strategy is based on the United
Nations Global Compact's ten principles. We endeavour to
make our contributions towards achieving the SDGs and report
our actions and initiatives according to international standards
and frameworks.
1.3 Environment performance
At SeaBird Exploration, we recognise the importance of
environmental sustainability and are committed to minimising
our impact on the environment. Our approach to
environmental management is guided by the United Nations
Sustainable Development Goals (SDGs), with a particular focus
on SDG 13 (Climate Action) and SDG 14 (Life Below Water).
Shipping is an important sector for global
trade and commerce, and as such, it has a
significant role to play in achieving
Sustainable Development Goal (SDG) 13,
which aims to take urgent action to
combat climate change and its impacts.
SeaBird Exploration takes responsibility to
protect the environment by carefully monitoring and managing
emissions, discharges, or spills that may cause environmental
and ecological hazards. Without precautionary measures, such
factors can severely impact air and water quality, as well as
marine diversity, in the shipping industry.
SeaBird Exploration's environmental policy covers the
company's management of environmental due diligence,
carbon dioxide emissions, sulphur oxide emissions, nitrous oxide
emissions, waste, and spills. Our Ship Energy Efficiency
Management Plan (SEEMP) and robust accident reporting
system facilitate diligent operations. Our ISO-certified Safety
Management System complies with the International Safety
Management Code (ISM), ensuring adherence to international
and local laws through proactive risk management, monitoring,
and reporting.
SeaBird Exploration focus on the following:
• Improving energy efficiency: Implement measures to
improve the energy efficiency of their vessels, such as
optimising speed.
• Reducing waste and emissions: Adopt practices to
reduce waste and emissions, such as waste reduction
and recycling programs, the use of scrubbers to
remove sulphur from emissions, and the use of ballast
water treatment systems to prevent the spread of
invasive species.
• Supporting international cooperation: Support
international cooperation initiatives such as the
International Maritime Organization (IMO) to develop
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Annual Report 2022
and implement policies and regulations aimed at
reducing the sector's impact on the environment.
• Encouraging sustainable supply chain practices: Work
with suppliers and customers to promote sustainable
supply chain practices, such as reducing emissions
from cargo handling and transportation.
By taking action in these areas, SeaBird Exploration help to
mitigate the impacts of climate change and contribute to the
achievement of SDG 13
The shipping industry must deal carefully
with any emissions, discharges, or spills that
cause environmental and ecological
hazards. Without precautionary measures,
these factors have major impacts on the
quality of air and water, and on marine
diversity. We understand our responsibility
to protect the environment. We monitor such risks carefully and
manage them to protect the environment and our organisation.
SeaBird Exploration is at risk from discharges and potential spills,
along with pollution. In order to succeed in our business and
market, we need to be able to manage these risks.
A review of all environmental threats found by SeaBird
Exploration enables us to develop adequate safeguards. To
minimise the environmental impact of our operations, we have
monitoring and management tools that comply with
international and local legislation. The Classification Society
performs annual audits in accordance with the ISM Code and,
where appropriate, ISO9001 and 14001 standards.
Oil spills can have severe and long-lasting effects on
ecosystems. Therefore, SeaBird Exploration has implemented
preventive measures and procedures to reduce the risk of oil
spillage. As a result, we are proud to report that we had zero oil
or environmental spills in 2022.
We take a proactive approach to minimize the risk of spills by
ensuring that all our vessels have Shipboard Oil Pollution
Emergency Plans (SOPEPs) and that our crew is trained to
respond quickly and effectively in case of an emergency. We
conduct regular SOPEP drills to maintain the readiness of our
teams and equipment.
By adopting these measures, we are not only protecting the
environment but also safeguarding the long-term sustainability
of our operations. We remain committed to continuously
improving our practices and working towards a zero-spill future.
Ships use ballast water to provide stability and balance during
voyages, which is taken on board when the vessel is in port to
offset the weight of fuel, cargo, or other materials. However,
ballast water can pose a significant problem as it may contain
harmful aquatic species, including bacteria, viruses, fungi, and
plants, as well as unwanted fish, shellfish, and crustaceans.
Discharging ballast water into new bodies of water can
introduce diseases, disrupt ecosystems, and compete with
native species for food and habitat, leading to significant
ecological and economic impacts.
To address this issue, the International Maritime Organization
(IMO) has developed the International Convention for the
Control and Management of Ships' Ballast Water and
Sediments, which requires ships to treat their ballast water to a
specified standard before discharge or exchange it with
seawater at sea to minimize the risk of introducing harmful
species into new environments. Many ships now use ballast
water management systems (BWMSs) to treat the water before
discharge, using physical, chemical, or biological methods to kill
or remove harmful species. However, the effectiveness of these
methods varies, and some BWMSs are more effective than
others at removing specific types of organisms.
We take environmental risks seriously and adhere to the
International Maritime Organization's Ballast Water
Management Convention. Our ships all have a Ballast Water
Management Plan authorized by the class and are equipped
with BWMSs to ensure the safe and responsible discharge of
ballast water.
Ghost nets and marine debris
Marine debris, particularly abandoned, lost, or discarded fishing
gear, known as ghost nets, can be a significant problem in the
marine environment. Ghost nets can continue to catch and kill
marine animals long after they have been discarded, and can
also entangle and damage underwater equipment. In the
context of seismic surveys, ghost nets and other marine debris
can pose a risk to the survey equipment, potentially causing
damage or delays in the survey.
Ghost nets and other marine debris are inadvertently dredged
up during the survey, and stored on the vessels, and
subsequently disposed of in port. All recovered debris is logged
within our safety management system. Since starting of logging
in November 2022, the Eagle Explorer has more than 13 cases of
debris being picked up and handed to shore for disposal.
In addition, we have implement procedures and protocols to
minimise the amount of marine debris generated during the
survey, such as properly disposing of any debris that is dredged
up during the survey, and ensuring that equipment is properly
secured and maintained to minimise the risk of loss or breakage.
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Annual Report 2022
Noise emissions
By establishing appropriate operating actions when sailing in
environmentally sensitive areas, efforts have been made to
decrease the influence of acoustic noise produced by seismic
vessels on marine animals. This is ensured by bringing protective
species observers on board as well as passive acoustic
monitoring. During 2022, our surveys shut down 45 times because
protective species were sighted in the vicinity of the project
area.
1.4 Social performance
This section provides information on Seabird Exploration's labour
practices, health and safety policies, and community
engagement initiatives. We also describe its efforts to promote
diversity and inclusion in the workplace, as well as its human
rights policies.
HSE performance
Offshore operations pose inherent safety
and security hazards that require careful
management to ensure the protection of
crewmembers, vessels, cargo, and the
environment. At SeaBird Exploration, we
maintain a zero-accident policy and
operate in strict compliance with the
International Safety Management (ISM) Code, as specified in
target 3.9.
We acknowledge that safety and security are critical aspects of
our operations and we are committed to ensuring that they are
given the highest priority. Our zero-accident policy is the
foundation of our approach to managing risk, and we have
implemented rigorous systems and procedures to support it. We
provide comprehensive training to our crewmembers to ensure
that they have the necessary skills and knowledge to identify
and manage risks effectively.
Compliance with the ISM Code is also central to our operations.
The Code sets out a comprehensive framework for managing
safety and security in the maritime industry, and we strictly
adhere to its provisions. We conduct regular audits and
inspections to ensure that our vessels and operations meet the
Code's requirements, and we take corrective action when
necessary.
We identify that our responsibilities extend beyond our own
operations. We work closely with other stakeholders, including
industry groups and regulatory authorities, to promote best
practices and improve safety and security throughout the
industry.
In summary, we understand the inherent hazards associated
with offshore operations and are committed to ensuring that
they are carefully managed to protect our crewmembers,
vessels, cargo, and the environment. Our zero-accident policy
and compliance with the ISM Code are central to our
approach, and we work closely with other stakeholders to
promote best practices and improve safety and security in the
industry.
At SeaBird Exploration, we prioritize the well-being of our workers
both onshore and offshore. Our commitment to health and
safety is a key component of our long-term success. We
understand that offshore operations inherently pose safety and
security hazards for our crew, vessel, cargo, and the
environment. That is why we operate with a zero-accident
policy and comply with the ISM Code.
To manage risks effectively, we have developed
comprehensive procedures to assess all known threats to our
ships and crew. We encourage our crew to report all accidents,
events, and near misses, and our managers support them in
doing so. We analyze accidents and incidents across our entire
fleet using the OCIMF guidelines for Lost Time Incidents and Total
Recordable Cases and Frequency. This detailed analysis helps
us identify the root causes of incidents and improve our
operations going forward.
In 2022, we recorded only three first aid cases, and one medical
treatment case that were associated with poor situational
awareness. We are proud to report that we had zero Lost Time
Incidents (LTI) during this period. We are committed to
continuously improving our safety measures and ensuring that
our workers operate in a safe and secure environment.
Human and labour rights
At our company, we are firmly committed
to upholding globally accepted human
rights, as outlined in the UN Guiding
Principles on Business and Human Rights
(UNGP). Our license to function depends
on the respect we show to workers, clients,
customers, societies, governments, and
other stakeholders with regard to their fundamental human
rights, as specified in targets 8.7 and 8.8.
We realise that the protection and promotion of human rights is
essential for the sustainable and responsible operation of our
business. Our principles are firmly rooted in the UNGP, which
serve as a universal framework for ensuring that businesses
respect human rights. We are dedicated to integrating these
principles into every aspect of our operations, from hiring and
training practices to supply chain management and community
engagement.
We understand that upholding human rights requires ongoing
effort and a commitment to continuous improvement. To this
end, we regularly review our policies and practices to ensure
that they are in line with the latest standards and best practices.
We work with a variety of stakeholders, to ensure that our efforts
are effective and meaningful.
In summary, our company is fully committed to upholding
globally accepted human rights in accordance with the UN
Guiding Principles on Business and Human Rights. We believe
that respecting human rights is essential for the responsible
operation of our business, and we are dedicated to
continuously improving our policies and practices to ensure that
we meet the highest standards.
At SeaBird Exploration, we prioritize the protection of human
rights and ensure that our actions are aligned with the
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Annual Report 2022
internationally declared standards. We appreciate the
importance of corporate support and respect for human rights,
and we are committed to upholding these principles in all
aspects of our operations. Our policies and practices are based
on the UN Guiding Principles on Business and Human Rights,
which cover all stakeholders, including workers, clients,
customers, society, government, and others.
As part of our commitment to human rights, we ensure that our
vessels comply with the Maritime Labour Convention (MLC
2006). Each vessel has a certificate to attest that it meets the
standards set out in this convention. Additionally, we have
signed a special agreement with the International Transport
Workers' Federation (ITF) to regulate seafarer working conditions.
We take the well-being of our employees seriously, and we
acknowledge their fundamental right to work in a safe and
healthy environment.
We continuously monitor our operations to ensure that we do
not engage in any activities that violate human rights. We have
robust systems in place to identify, prevent, and mitigate any
potential risks. We work closely with stakeholders, including local
communities and authorities, to address any concerns and
uphold human rights.
In summary, SeaBird Exploration is committed to respecting
human rights and ensuring that our operations align with
internationally declared standards. We prioritize the well-being
of our employees and work closely with stakeholders to prevent
any potential breaches of human rights.
Diversity and equality
At SeaBird Exploration, we are committed
to creating a diverse and inclusive
workplace that values and promotes
equality. As part of our commitment to
achieving SDG #5 (Gender Equality), we
understand that diversity is a strength that
drives long-term value development. We
believe that a workforce with diverse backgrounds and
experiences encourages creativity and smarter business
decisions, allowing us to adjust quickly to changing markets and
situations.
To ensure that our workplace is inclusive, we have established a
Code of Conduct that outlines standards and guidelines that
our crewmembers must follow. Our company prohibits
discrimination based on sex, ethnicity, color, age, religion, sexual
orientation, marital status, national origin, disability, heritage,
political opinion, or any other basis against any employee. We
take deviations from external legislation or our own guidelines
seriously, and deviations or suggestions of deviations should be
reported directly to the nearest manager or according to our
complaints procedures.
We acknowledge that the maritime industry is predominantly
male, with women accounting for only 2% of the world's 1.2
million seafarers, as reported by the International Maritime
Organization (IMO), with 94 percent working in the cruise
industry. As such, we aspire to contribute to a more gender-
diverse industry by balancing the gender composition of our
workforce.
In 2022, the average gender distribution offshore at SeaBird
Exploration was 4.5% women, some of whom were also serving
as officers. We believe that achieving gender parity could open
up a big pool of untapped potential. In the office, our gender
distribution is 40% women and 60% men, while there is a 50/50
distribution of women and men in the management team.
In summary, SeaBird Exploration is an equal opportunity
employer committed to diversity and inclusivity. We prohibit
discrimination against any employee and expect our crew to
follow our Code of Conduct. We aspire to contribute to a more
gender-diverse industry and are committed to achieving
gender parity in our workforce.
Training and development
Admitting that investing in training and
development is essential to building a
strong and successful organization. We
believe that providing our personnel with
opportunities to learn and grow not only
boosts productivity and efficiency but also
promotes safe operations.
We are committed to a methodical approach to training and
development, ensuring that our personnel have the right skills
and knowledge to excel in their roles. By placing the right
people in the right positions through training and development,
we are able to deliver meaningful and inclusive work that
contributes to our overall success.
We are proud to foster a culture of learning and development.
We believe that investing in our personnel's growth and
development is essential to ensuring organizational stability and
achieving our long-term goals.
As part of our commitment to education and training in the
maritime industry, SeaBird Exploration provides opportunities for
cadets to gain hands-on experience on board our vessels. We
confirm the importance of supporting the next generation of
seafarers and are proud to contribute to their education and
development.
Taking cadets on board our vessels allows them to gain practical
knowledge and skills that cannot be learned in a classroom
setting alone. We believe that this experience is invaluable to
their education and future careers in the industry.
We are committed to promoting education and training
opportunities for all individuals interested in pursuing a career in
the maritime industry. By providing opportunities for cadets to
gain experience on our vessels, we are helping to cultivate the
next generation of skilled and knowledgeable seafarers.
1.5 Governance performance
This section provides information on Seabird Exploration's
corporate governance practices, including its board structure
and processes for managing risk. The company could also
describe its internal controls and its policies for ensuring ethical
business practices.
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Annual Report 2022
Our company is committed to upholding
human rights and promoting universal
labor standards. We ensure responsible
conduct among our employees through
our values, policies, and procedures in line
with target 16.1. Corruption is strictly
prohibited in our organization, and we
encourage our staff to report any concerns they may have, as
per target 16.2.
Ethical business conduct
SeaBird Exploration upholds the highest standards of ethics and
integrity in conducting our business operations. Our
commitment to these values is reflected in our Code of Conduct
and adherence to the most stringent regulations and industry
recommendations, including the OSEBX.
We notice that strong governance and risk management
structures are critical to achieving commercial success and
creating long-term value for our stakeholders, including
employees, owners, and society at large. As such, we prioritize
transparency, reliability, and accountability in our reporting and
communications.
To ensure that our employees are equipped with the necessary
training and reporting channels, we have established robust
policies and procedures for incident reporting and follow-up.
We are fully committed to operating safely and in compliance
with local laws and regulations, and we communicate the
implications of applicable legislation to our employees through
comprehensive training programs.
At SeaBird Exploration, we are dedicated to promoting
effective, accountable, and inclusive institutions at all levels of
our organization, which is crucial to building a sustainable future.
Code of Conduct
SeaBird Exploration's commitment to transparency,
accountability, and ethical conduct is reflected in all aspects of
our business. We operate in compliance with all laws and
regulations in the jurisdictions where we work, including those in
nations and regions with underdeveloped human rights and
corruption frameworks. Our employees are expected to act
with integrity and honesty, regardless of any conflict of interest,
whether personal or organizational. Our activities contribute to
achieving SDG 8, which promotes decent work and economic
growth.
To ensure that everyone who works for and on behalf of SeaBird
adheres to our high standards of behavior and business
practices, we have developed a comprehensive Code of
Conduct. The Code outlines our beliefs and expectations on
important matters such as human and labor rights, health and
safety, business ethics, legal compliance, and more. It is
available on our website, in the Safety Management System,
and as part of new employee induction. Additionally, the Code
of Conduct is included as a general addendum in every
significant contract SeaBird Exploration signs with third parties.
Whistleblowing
SeaBird Exploration values a culture of transparency and
effective communication, recognising its importance in
achieving our objectives. We have developed a Whistleblowing
Policy to provide support to all employees and contractors who
wish to report any concerns about the company's activities,
including any actions or incidents that are in violation of the law,
our Code of Conduct, or other policies.
To encourage reporting, SeaBird Exploration has established
secure channels for reporting incidents and whistleblowing, as
well as fostering an environment where employees are
comfortable raising any concerns. Our co-workers can report
any critical issues confidentially by sending an email to
whistle@sbexp.com.
We want to assure our employees and contractors that SeaBird
Exploration and its representatives will not retaliate against
anyone who reports a concern through this channel. To date,
there have been no reports made through this channel.
Anti-bribery and corruption
SeaBird Exploration has a firm stance against corruption and
bribery in the shipping industry. Such practices pose a threat to
social and economic development, and can jeopardize the
safety of shipping crews, increase legal and reputational risks,
and drive up costs. We have implemented a zero-tolerance
policy for bribery and corruption across all stages of our
operations, as stated in our Code of Conduct.
To manage our corruption risk, we pay close attention to
operations in high-risk countries and have not made port calls in
any of the countries ranked in the bottom 20 of Transparency
International's Corruption Perception Index in 2022. We have
also ensured that there were no facilitation payments made in
2022, and have had no non-monetary sanctions imposed on us.
SeaBird Exploration is committed to promoting transparency,
fighting corruption, and employing a range of anti-corruption
measures. All our personnel undergo mandatory anti-corruption
training to raise awareness of corruption and teach them how
to deal with bribery hazards.
Supply chain management
SeaBird Exploration operates with utmost integrity and holds all
its business partners to the same ethical standards. Prior to
engaging in any significant commitments or large-scale
projects, we ensure that we have sufficient information about
potential collaborators to assess any possible exposure to
corruption or human rights issues.
The level of due diligence required for a particular business
associate is directly related to the level of cooperation involved.
Therefore, we may conduct a thorough due diligence
investigation of potential partners, including an assessment of
any reputational concerns. We conduct screening of key
suppliers, including shipping agents and commercial agents,
prior to each engagement and require them to complete a
comprehensive due diligence checklist.
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Annual Report 2022
To enhance supplier compliance and effective management,
we are in the process of implementing new procedures for
onboarding, supplier management, and chase vessel tendering
and selection. All our vendors are required to certify that they
have read and understood SeaBird Exploration's policies,
including the Code of Conduct.
Corporate governance
Transparency and trust are vital components of strong
corporate governance. SeaBird Exploration recognises the
importance of fostering openness and confidence among all
stakeholders, which include shareholders, the board of
directors, executive management, employees, customers,
suppliers, government agencies, and the public.
1.6 Targets and progress
This section outlines the company's ESG targets and goals, as
well as its progress in meeting these targets.
Every year we develop or continue a set of key indicators or
targets that relates to the different aspects of sustainable
development, a set of KPIs are listed below.
KPI
SDG
Target 2023
LTI
SDG 3
0
TRCF
SDG 3
< 1
Total injury rate
SDG 3
< 1
Intervention rate
SDG 8
> 1034
Training hours
SDG 4
> 7059
Retention rates
SDG 8
> 90%
Experience rates
SDG 4
> 90%
Spill
SDG 14
0
Garbage
SDG 14
Reduction from
2022
Emissions
SDG 13
> 80%
Supplier evaluation
SDG 16
> 50
As our operations depend on the type of project we have and
the number of vessels in operation, it is difficult to set targets for
the emissions. We have therefore, developed a set of parameter
settings for the engines and compressors, which has been
defined in the Ship Energy Efficiency Management Plan
(SEEMP). The most environment-friendly settings have been
called green seismic operation or green transit, depending on
the type of operations. Our KPI is set on how often we manage
to use the green settings. These targets are measured and
followed up on a quarterly basis. In addition, we have
implemented a monitoring system for the engine settings
(Maress), which allows us to compare engine load with
operations, and hence promote the trim of the engines, which
gives the less emissions.
1.7 Future goals and plans
In recent years, there has been an increasing demand for
sustainable development practices in the energy industry, and
Seabird Exploration has taken steps towards this by
implementing various initiatives. Here are some areas for
improvement of Seabird Exploration's sustainable development
in the future:
1. Reduce greenhouse gas emissions: Seabird
Exploration aim to reduce its greenhouse gas
emissions by implementing measures such as
using engines that are more efficient and
reducing fuel consumption during operations
2. Implement sustainable practices in its operations:
The Company aim to reduce its environmental
impact by implementing sustainable practices
such as reducing waste, using eco-friendly
materials and recycling.
3. Collaborate with stakeholders: The Company will
encourage collaboration with stakeholders such
as governments, NGOs, and local communities to
ensure that its operations are sustainable and do
not have any negative impacts on the
environment or local communities.
4. Encourage sustainability in its supply chain:
Seabird Exploration encourage sustainability in its
supply chain by working with suppliers who are
committed to sustainable practices, and by
sourcing materials and equipment that are
environmentally friendly.
Overall, Seabird Exploration prioritise sustainable development
in all aspects of its operations, from reducing its environmental
impact to collaborating with stakeholders to ensure that its
operations are sustainable and beneficial for all.
1.8 Stakeholder engagement
Stakeholder engagement is a critical aspect of sustainable
development for companies like Seabird Exploration. As a
marine seismic data acquisition company, Seabird Exploration
operates in various regions globally, which requires it to interact
with different stakeholders, including governments, NGOs, local
communities, employees, and customers.
To ensure sustainable development, Seabird Exploration
engages with its stakeholders in various ways. One of the
company's primary ways of engaging stakeholders is through
regular dialogue with local communities, governments, and
NGOs. It collaborates with governments and NGOs to comply
with regulations, identify and mitigate environmental and social
risks, and promote responsible practices.
Seabird Exploration also engages its employees through various
initiatives to ensure that they are informed about the company's
policies and practices related to sustainable development. The
company provides training on environmental and social issues,
encourages employees to report any concerns, and recognizes
their contributions to sustainable development.
In addition to engaging with its primary stakeholders, Seabird
Exploration also engages with its customers. The company works
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Annual Report 2022
with its customers to understand their needs and preferences,
identify areas for improvement, and promote responsible
practices in the energy industry.
Overall, Seabird Exploration's stakeholder engagement
practices help it to identify and address environmental and
social risks, promote responsible practices, and build trust and
support among its stakeholders. By engaging with its
stakeholders, the company can also build its reputation as a
socially responsible and environmentally conscious company,
which can help it to attract and retain customers, employees,
and investors who value sustainable development.
1.9 Disclaimer and assumption for the
ESG reporting
The data presented is based on the most reliable information
available at the time of reporting. While ESG disclosures provide
insight into the management of sustainability risks, some data
may be estimated in certain areas.
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Annual Report 2022
Appendix: Sustainability accounting norms
Topic
Accounting metrics
Unit of measure
Data 2021
Data 2022
Reference
Climate risk and
climate footprint
Scope 1 GHG emissions
Metric tonnes
CO
2
-eq.
22 354
15 597
GRI 305-1
SDG 13
Air pollution
Sulphur emissions (kg)
5 327
5 718
MARPOL Annex VI
Reg. 14
Other air emissions
Metric tonnes (t)
NO
x
: 172
NO
x
: 197
GRI 305-7
SDG 3
MARPOL Annex VI
Reg. 13 and 14
Ship recycling
Responsible ship recycling
Text/figure
N/A
N/A
SDG 8, 12 and 14
EU ship recycling
regulation (EU
1257/2013)
Ecological
impacts
Shipping duration in marine
protected areas and areas
of protected conservation
status
Number of travel
days
0
0
GRI 304-2
SDG 14
Number of aggregate
volume of spills and releases
to the environment
Number, cubic
meters (m
3
)
0
0
GRI 306-3
SDG 14
Accidents, safety
and labour rights
Lost time incident
frequency (LTIF)
Rate
0
0
GRI 403-9
SDG 3 and 8
IMO ISM code
Diversity
Percentage (%)
At the end of 2022, the diversity mix
was 60% men and 40% women in the
office, same as end of 2021
GRI 405-1
SDG 5 and 10
Labour rights
Text
Maritime Labour Convention (MLC)
certification on all managed vessels
GRI 102-41
SDG 8
Port state control
Number of
deficiencies
5
0
SDG 8 and 14
Marine casualties
Number
0
0
SDG 8
Business ethics
Corruption risk
Number of value
Survey in Nigeria
0
SDG 16
Facilitation payments
Number
0
0
SDG 16
Fines
Figure
Reporting
currency
0
$300
GRI 419-1
SDG 16
ESG governance
Policies and targets
Text
Code of Conduct, HSE policy,
whistle-blower procedure
GRI
Disclosure of
Management
Approach
Activity metric
Unit of measure
Data 2021
Data 2022
Number of unique shipboard individuals
Number
459
414
Total distance travelled by vessels
Nautical miles (nm)
45 182
49 464
Operating days
Days
365
365
Number of vessels in total shipping fleet
Number
4
3
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Annual Report 2022
Management Report
This Management Report is prepared for Seabird Exploration PLC
(alone or together with its subsidiaries referred to as "Seabird" or
"Company" or "Group").
1.1 Operating activities
2022 was a year of transition from both low activity in the seismic
market and end of COVID-19. During the year the Company
managed to secure new long-term contracts for its assets and
to keep employment of assets through the year.
The Eagle Explorer completed a 2D survey in India in March and
started a new 2D project in India later in the year.
The Petrel Explorer was laid up until it was sold and delivered to
its new owners in August.
The Fulmar Explorer commenced its first project after completion
of conversion in March and has been in operation for the rest of
the year.
Seabird’s shares in Green Minerals AS were distributed to its
shareholders on 25 January 2023. Green Minerals AS is
recognised as discontinued operation in the annual accounts
herein, historical numbers have not been updated.
1.2 Seismic services outlook
During 2022 the demand normalized as per normal seasonal
fluctuations and towards to the end of year the market
improved further.
In the seismic market, SeaBird operates in two segments: 2D and
OBN source. OBN is primarily related to increased recovery from
producing fields and seismic spending the last couple of years
has largely been allocated to improved oil recovery (IOR) from
producing fields as well as near-field exploration.
This has resulted in a commensurate increase in source vessel
demand related to ocean bottom seismic surveys. The ocean
bottom seismic (OBS) market is still expected to be a core
market for the company and is therefore less sensitive to
fluctuations in oil price than conventional 2D and 3D seismic.
Contract prices are improving compared to previous quarters
and expected to increase gradually, especially if 2D activity
continues to increase, with the majority of the relevant global
fleet being allocated either to OBN source or 3D. Following the
completed source rigging of Fulmar Explorer, the company will
have an upgraded modern, versatile, and competitive fleet of
2 owned vessels plus the ability to outfit additional further vessels.
1.3 Quality, Health, Safety, and
Environment
We are guided by our commitment to quality, health, safety,
and environment (QHSE).
SeaBird’s operating management system is central to the
company’s performance evaluation process and is fully
endorsed and supported by senior management through the
company’s policies.
In addition to quality, the system ensures safe operations. The
company had none Loss time incidents (LTI) in 2022.
SeaBird’s detailed analysis of past performance ensures that
continual improvements are being made to QHSE procedures
and also ensures that set QHSE targets for 2022 are achievable.
Focal points for 2023 is to continue to streamline operations
without compromising on health, safety, environment, and
quality.
Our management system is certified to ISO 14001:2015
(environmental management systems), ISO 9001:2015 (quality
management systems) and ISO 45001:2018 (occupational
health and safety management systems).
All SeaBird vessels comply with the requirements of the
International Safety Management code and the Marine Labor
Convention 2006.
The company continues to work actively on minimizing its
impact on the environment. We strive to achieve the highest
levels of environmental awareness and operational
competency. Continual improvement is achieved by
developing ever more stringent internal environmental plans
and targets annually. No environmental incidents were
recorded in 2022.
Established QHSE processes ensures the company:
✓ Provides a safe, healthy work environment both
offshore and onshore;
✓ Continuously improves operational performance and
quality;
✓ Deliver its services promptly and cost effectively
✓ Considers the environment in all aspects of its
operations
1.4 Transparency act
The Transparency Act came into effect in Norway on July 1,
2022, and requires several Norwegian companies to have a
relationship with how their business operations may impact
fundamental human rights and decent working conditions. The
background for this law is a clear expectation from the
authorities, society, and clients that businesses should act with
increased responsibility throughout their value chain.
SeaBird Exploration, as an ISO-certified company and thus has
already developed routines to identify and manage risk in our
day-to-day operations, where negative impacts on human
rights and the environment in supply chains are identified. We
have developed a questionnaire, where among others forced
labour, child labour and other human rights violations, as well as
environmental risks and impacts are addressed. One of the
challenges encountered is to have the questionnaires returned
in a timely manner, but so far we have not identified any
negative impacts on neither human rights nor environment.
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Annual Report 2022
SeaBird Exploration has a system in place to address and
handles any non-compliance to our code of conduct. We also
carry out in-house audits to verify the compliance of our
suppliers (in 2022, four companies where audited). In 2022, we
have used 200 different suppliers, and we have received
feedback from ten of these.
1.5 Interaction with the capital market
Key events
In January 2022 the Company issued 14,000,000 new shares at a
premium price of NOK 2.25 and increased its share capital by
EUR 2,380,000 to EUR 8,207,033.
In May 2022 the Company issued 3,500,000 new shares at a
premium price of NOK 2.25 and increased its share capital by
EUR 595,000 to EUR 8,802,033.
In July 2022 the Company issued 26,699,600 new shares at a
premium price of NOK 3.00 and increased its share capital by
EUR 4,538,932 to EUR 13,340,965.
In November 2022 the Company issued 2,000,000 new shares at
a premium price of NOK 3.00 and increased its share capital by
EUR 340,000 to EUR 13,680,965.
In December 2022 the Company reduced its share premium by
USD 16,233,336 with the purpose of write off losses of the
Company. The share premium was further reduced by USD
4,965,858 in relation with the distribution of the Company’s
shares in Green Minerals AS to its shareholders. The distribution
was completed on 25 January 2023.
1.6 Financial calendar
1.7 20 largest shareholders’ table
Investor
No. of shares
per 31.12.2022
% of total
Mh Capital As
8,339,792
10.4%
Anderson Invest As
6,019,236
7.5%
Alden As
5,577,219
6.9%
Grunnfjellet As
5,075,301
6.3%
Europa Link As
3,890,371
4.8%
Storfjell As
3,255,775
4.0%
Myrseth
2,524,999
3.1%
Langebru As
2,500,300
3.1%
Nordnet Livsforsikring As
2,221,165
2.8%
Vicama Capital As
1,666,700
2.1%
Haustkollholmen As
1,628,914
2.0%
Sigstad
1,377,000
1.7%
Ubs Ag
1,214,812
1.5%
Miel Holding As
1,125,446
1.4%
Grønland
1,000,000
1.2%
Kfs As
1,000,000
1.2%
F Storm As
953,122
1.2%
Sandberg Jh As
890,307
1.1%
Hubris Industrier As
883,333
1.1%
Titan Venture As
800,000
1.0%
Total number owned by top 20
51,943,792
65%
Total number of shares
80,476,265
100.00%
1.8 Financial review
The consolidated financial statements of SeaBird Exploration Plc
as well as the separate financial statements for the parent
company are prepared in accordance with International
Financial Reporting Standards as adopted by the European
Union. Revenues were USD 20.2 million in 2022 compared to USD
20.7 million in 2021. Vessel utilization decreased from 49% in 2021
to 39% in 2022. The majority of our revenues were related to
contracts with oil companies and other seismic companies. Cost
of sales was USD 19.0 million in 2022 (USD 21.0 million in 2021).
SG&A was USD 3.9 million in 2022, down 30% year-over-year from
USD 5.6 million. Depreciation and amortization were USD 7.1
million in 2022 (USD 5.8 million in 2021). Total impairments were
USD 1.5 million in 2022 (USD 1.0 million in 2021). The impairments
were primarily related to Petrel Explorer that was sold in August
2022. The company reports a loss from continuing operations of
USD 11.6 million for 2022 (loss of USD 11.4 million in 2021). Capital
expenditures were USD 3.9 million in 2022, down from USD 21.0
million in 2021 and is mainly related to the finalization of the
conversion of Fulmar Explorer. Cash and cash equivalents
excluding discontinues operation at the end of the period were
USD 0.9 million (USD 2.3 million in 2021). Net cash from operating
activities was negative USD 17.0 million in 2022 (positive USD 6.3
million in 2021). The company’s term loan facility is secured with
1st priority mortgage on Eagle Explorer and Fulmar Explorer. As
of 31 December 2022, the drawn amount on the facility was USD
Annual
General
Meeting
27.07.
2023
Half
Year
2023
25.08.
2023
Third
Quarter
2023
10.11.
2023
Fourth
Quarter
2023
16.02.
2024
18
Annual Report 2022
15.7 million. Net interest-bearing debt was USD 15.4 million as per
31 December 2022 (net debt of USD 13.0 million as per 31
December 2021). The Group announced on 9 June that it and
its main lender has signed a term sheet for the refinancing of the
Company's term loan and guarantee facilities. The full loan
amendment agreement is not executed yet. The new facilities
expire on 30 June 2026. The company has financial risk
management objectives and policies to handle cash flow,
liquidity, and credit risk, which includes frequent forecasting,
review by management and board and by holding sufficient
cash reserves to fund the company’s operations. The company
does not hedge currency, credit, bunker, or other forms of risk.
Please see notes 3 and 30 for further details on the company’s
risk management policies and key risk exposures.
1.9 Significant events during the year
On 3 January 2022, the company completed an Extraordinary
General Meeting. All proposals on the agenda were adopted
with the requisite majority.
On 13 January 2022, the company announced Contemplated
private placement and potential sale of vessel.
On 14 January 2022, the company announced Private
placement successfully completed.
On 26 January 2022, the company announced Strategic review.
On 9 February 2022, the company announced LOI for OBN
Source contract.
On 4 March 2022, the company announced Award of OBN
Source contract.
On 28 April 2022, the company announced LOI for acquisition
of shares in the company subject to due diligence.
On 7 June 2022, the company announced Award of OBN
Source contract.
On 30 June 2022, the company announced LOI for acquisition
of all shares had been put on hold due circumstances outside
both parties control.
On 18 July 2022, the company announced sale of Petrel
Explorer.
On 25 July 2022, the company announced award of 2D
contract in Eastern Hemisphere.
On 28 July 2022, the company announced appointment of Mr.
Finn Atle Hamre as CEO of the company and Mr. Sveinung
Alvestad as interim CFO.
On 28 July 2022, the company announced Contemplated
private placement and potential sale of vessel.
On 28 July 2022, the company announced Private placement
successfully completed.
On 9 August 2022, the company announced AGM minutes and
Mr. Odd Sondre Helsing as new Director of the Company.
On 30 August 2022, the company announced completion of the
sale of Petrel Explorer.
On 13 September 2022, the company announced the
resignation of Mr. Svein Øvrebø has resigned from the
nomination committee.
On 13 September 2022, the company announced notice of
extraordinary general meeting.
On 13 October 2022, the company announced minutes from
extraordinary general meeting.
On 2 November 2022, the company announced change of
name and ticker from Green Energy Group to SeaBird
Exploration and ticker SBX.
On 30 December 2022, the company announced Cyprus Court
approval of distribution of shares in Green Minerals AS.
1.10 Corporate Governance
Our corporate governance policy guides our operations and
culture. The company’s corporate governance policies are set
out in the corporate governance section of this annual report.
1.11 Going concern
The company’s accounts have been prepared on the basis of
a going concern assumption. Please refer to note 2.1 in the
consolidated financial statements.
1.12 Subsequent events
The most significant events occurred after the date of the
statement of the financial position include:
On 12 January 2023, the company announced distribution of
shares in Green Minerals.
On 31 January 2023, the company announced contract
extension.
On 10 May 2023, the company announced contract award for
Eagle Explorer.
On 9 June 2023, the company announced it has signed a term
sheet for the refinancing of the Company's term loan and
guarantee facilities. The full loan amendment agreement is not
executed yet.
For the full list of subsequent events please refer to Note 32 of
the consolidated financial statements.
1.13 Group Outlook
The company sees strong tendering activity in the OBN source
segment and some interesting 2D prospects.  Activity level is
paired with longer contract durations assumed to be a result of
the general energy situation and oil price. The company
believes oil and gas will remain an important part of the energy
mix in the foreseeable future.
Focus on increased oil recovery and near field developments
will continue to be an important demand driver for the
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Annual Report 2022
company’s OBN source services. OBN source is expected to
form the base for the company’s seismic offering going forward
and with quality tonnage, such as the “Eagle Explorer” and the
“Fulmar Explorer”, the company is in a good position to secure
consistent high utilization. We believe some laid-up vessels may
be re-activated for new projects.
2D remains a cost-efficient exploration method, with national
energy security in select regions as the main driver. Current 2D
tendering activity attests to this.
SeaBird`s response to take advantage of this change in market
dynamics is to consolidate as much high-end capacity as we
can and thereby increase our market share. SeaBird’s
equipment pool enhances SeaBird’s ability to capitalize on its
seismic know-how and market access by equipping third party
vessels on flexible charters. SeaBird is in a unique position to offer
both 2D and OBN source and is therefore able to take
advantage of the higher utilization potential of OBN source,
while at the same time capitalizing on the higher earnings
potential in the niche 2D market.
1.14 Deviation from Q4 2022 report
The group's annual consolidated financial statement have been
adjusted compared to the unaudited quarterly results
announced on 24 February 2023. The adjustments reflects
amended accruals of post-balance sheet events and reversal
of an accruals. The total effect is an increased of loss of USD 2.3
million in the Company’s consolidated statement of income for
2022.
1.15 Resolution
The financial statements for the company have been prepared
in accordance with International Financial Reporting Standards.
They were prepared under the historical cost convention and
are based on the going concern assumption.
The company’s net loss for 2022 is USD 12.9 million. The net loss
for the year is carried forward and will be settled against future
gains.
1.16 Financial risk and instruments
SeaBird’s activities are exposed to a variety of financial risks:
market risk (including currency risk, interest rate risk and price
risk), credit risk and liquidity risk. The Group’s overall risk
management focuses on the unpredictability of financial
markets and monitors and controls risks with a potential
significant negative effect for the Group and evaluates to
minimize the risks if the cost of doing so is acceptable. For further
information please see Note 3 and 30 in the Consolidated
Financial Statement.
1.17 Group composition
With reference to note 19 in the Consolidated Financial
Statement
Company
Shareholding
and voting
rights
Aquila Explorer Inc.
100%
Biliria Marine Company Limited
100%
GeoBird Management AS
100%
Green Energy Group AS
100%
Green Minerals AS
51%
Harrier Navigation Company Limited
100%
Hawk Navigation Company Limited
100%
Munin Navigation Company Limited
100%
Oreo Navigation Company Limited
100%
Raven Navigation Company Limited
100%
Sana Navigation Company Limited
100%
Seabed Navigation Company Limited
100%
SeaBird Crewing Mexico S. DE R.L. DE C.V.
100%
SeaBird Exploration Americas Inc.
100%
SeaBird Exploration Asia Pacific PTE. Ltd.
100%
SeaBird Exploration Crewing Limited
100%
SeaBird Exploration Cyprus Limited
100%
SeaBird Exploration Finance Limited
100%
SeaBird Exploration FZ-LLC
100%
SeaBird Exploration Multi-Client Limited
100%
SeaBird Exploration Nigeria Ltd.
100%
SeaBird Exploration Norway AS
100%
SeaBird Exploration Private Limited
26%
SeaBird Exploration Shipping AS
100%
SeaBird Exploration Vessels Limited
100%
SeaBird Seismic Mexico S. DE R.L. DE C.V.
100%
Susco AS
100%
1.18 Dividend
No dividend was distributed for 2021and 2022.
1.19 Share capital
There are no any restrictions in exercising of voting rights. Please
be referred to Note 15 in the Consolidated Financial Statement
for further information.
1.20 Board of Directors
The Board of Directors consists of Ståle Rodahl (Executive
Chairman of the board), Øivind Dahl-Stamnes (Director),
Nicholas Knag Nunn (Director), Hans Christian Anderson
(Director) and Odd Sondre Svalastog Helsing (Director. Please
be referred to Note 29 for further information.
20
Annual Report 2022
1.21 Committees
Audit Committee:
• Ståle Rodahl – Executive Chairman of the board
• Nicholas Knag Nunn – Director of the board
Nomination Committee:
• Stig Myrseth
• Per Øyvind Berge
• Hans Jan Henry Anderson
1.22 Internal control
The Group operates an internal control system and procedures,
the adequacy of which is evaluated by the Board of Directors
and by an independent Audit Committee which was
established by the Board of Directors. The operation of the
internal control system is intended to manage the risks of not
achieving business objectives and ensure to a reasonable
extent the proper management of the risks of its financial and
operational systems Group. The internal control system includes
procedures aimed at detection and prevention of errors,
omissions and/or fraud which they could cause material
inaccuracies in the preparation of the Group's financial
statements. The adequacy of the internal control system ensures
the validity of financial data and protection against material
errors in the presentation of the Group's results.
Furthermore, the Group performs annual internal audit; Internal
audit to control compliance towards requirements in; ISO 9001,
ISO 14001, ISO 45001, ISM code, ISPS code, MLC and
requirements of the Management System.
1.23 Independent Auditors
The independent auditors RSM Cyprus Ltd have expressed their
willingness to continue in office as the Company’s auditors. A
resolution authorizing the Board of Directors to appoint and fix
their remuneration will be proposed at the next AGM.
The board of directors Seabird Exploration PLC
Date 23 June 2023
1
Annual Report 2022
Consolidated Financial Accounts
Consolidated statement of income ........................................... 22
Consolidated statement of comprehensive income ................ 23
Consolidated statement of financial position ............................ 24
Consolidated statement of financial position ............................ 25
Consolidated statement of changes in equity .......................... 27
Consolidated statement of cash flow ........................................ 28
Notes to the consolidated financial statements ....................... 29
1 General information ........................................................ 29
2 Summary of significant accounting policies .................. 29
2.1 Basis of preparation ......................................................... 29
2.2 Adoption of new or revised standards and
interpretations .................................................................. 31
2.3 Consolidation ................................................................... 31
2.4 Segment reporting ........................................................... 32
2.5 Foreign currency translation ........................................... 32
2.6 Interests in joint operations and associates ................... 33
2.7 Property, plant and equipment ...................................... 33
2.8 Intangible assets .............................................................. 34
2.9 Impairment of non-financial assets ................................ 35
2.10 Non-current assets held for sale...................................... 35
2.11 Financial assets and financial liabilities .......................... 36
2.11.1 Financial assets - classification ........................................ 36
2.11.2 De-recognition of financial assets .................................. 37
2.11.3 Financial assets: impairment and credit loss allowance
for ECL 37
2.11.4 Reclassification of financial assets .................................. 38
2.11.5 Financial assets write off .................................................. 38
2.11.6 Financial liabilities measurement categories ................. 38
2.11.7 De-recognition of financial liabilities .............................. 38
2.12 Inventories ........................................................................ 39
2.13 Cash and cash equivalents ............................................ 39
2.14 Share capital .................................................................... 39
2.15 Current and deferred tax ................................................ 39
2.16 Employee benefits and share based payments ........... 39
2.17 Provisions .......................................................................... 40
2.18 Revenue recognition ....................................................... 41
2.19 Leases ............................................................................... 42
2.20 Dividend distribution ........................................................ 43
2.21 Comparatives .................................................................. 43
2.22 Contingent assets and liabilities ..................................... 43
2.23 Contract costs ................................................................. 44
2.24 Costs to fulfil a contract .................................................. 44
3 Risk factors and financial risk management ................. 44
3.1 Financial risk factors ........................................................ 44
3.2 Other risk factors .............................................................. 45
3.3 Fair value estimation ....................................................... 46
4 Critical accounting estimates and judgments ............. 46
5 Segment information ...................................................... 47
6 Revenue ........................................................................... 48
7 Property, plant and equipment ..................................... 48
8 Income tax expense ....................................................... 50
9 Multi-client library ............................................................ 51
10 Trade receivables and contract assets ......................... 51
11 Other current assets ........................................................ 52
12 Asset held for sale ............................................................ 52
13 Inventories ........................................................................ 52
14 Cash and bank balances ............................................... 53
15 Share capital and share options .................................... 53
16 Trade and other payables .............................................. 54
17 Provisions .......................................................................... 55
18 Interest bearing loans and borrowings .......................... 55
19 Subsidiaries within the Group.......................................... 56
20 Other financial items, net ............................................... 57
21 Other income (expenses), net ....................................... 58
22 Expenses by nature ......................................................... 58
23 Employee benefit expense............................................. 58
24 Finance expense ............................................................. 59
25 Earnings per share ........................................................... 59
26 Dividends ......................................................................... 59
27 Commitments and contingencies ................................. 59
28 Leases ............................................................................... 60
29 Related-party transactions ............................................. 60
30 Financial instruments ....................................................... 61
31 Long-term investments .................................................... 64
32 Subsequent events .......................................................... 64
33 Performance measurement definitions ......................... 64
34 Operating environment .................................................. 65
22
Annual Report 2022
Consolidated statement of income
Year ended 31 December
All figures in USD 000's
Note
2022
2021
Revenues
5, 6
20,164
20,705
Cost of sales
22
-19,036
-21,013
Selling, general and administrative expenses
22
-3,889
-5,563
Allowance for ECL and write offs, net of reversals
10
-
-30
Other income (expenses), net
21
1,485
1,716
Earnings before interest, tax, depreciation and amortization (EBITDA)
-1,276
-4,185
Gain/(loss) on sale of property, plant and equipment
260
-807
Depreciation
7
-6,960
-5,644
Amortization
9
-139
-129
Impairment
7, 12
-1,502
-1,014
Earnings before interest and taxes (EBIT)
-9,617
-11,779
Finance income
10
0
Finance expense
24
-1,854
-655
Share of net income of associates
19
224
-
Other financial items, net
20
-475
719
Profit/(loss) before income tax
-11,712
-11,715
Income tax
8
107
290
Profit/(loss) continuing operations
-11,605
-11,425
Net profit/(loss) discontinued operations
-1,256
-
Profit/(loss) for the period
-12,861
-11,425
Profit/(loss) attributable to continuing operations
Shareholders of the parent
-11,605
-10,839
Non-controlling interests
19
-
-586
Profit/(loss) attributable to discontinued operations
Shareholders of the parent
-639
-
Non-controlling interests
19
-617
-
Earnings per share
25
-0.21
-0.35
Earnings per share from continued operations
25
-0.20
-0.35
Earnings per share from discontinued operations
25
-0.01
-
23
Annual Report 2022
Consolidated statement of comprehensive income
Year ended 31 December
All figures in USD 000's
Note
2022
2021
Profit/(loss)
-12,861
-11,425
Other comprehensive income
-
-
Exchange difference arising on the consolidation of foreign companies financial
accounts
-
-
Total other comprehensive income, net of tax
-
-
Total comprehensive income
-12,861
-11,425
Total comprehensive income attributable to:
Shareholders of the parent
-12,244
-10,839
Non-controlling interests
19
-617
-586
Total
-12,861
-11,425
24
Annual Report 2022
Consolidated statement of financial position
As of 31 December
All figures in USD 000's
Note
2022
2021
ASSETS
Non-current assets
Property, plant and equipment
7
42,982
46,050
Multi-client library
9
54
179
Investment in associates
19
224
-
Total non-current assets
43,260
46,229
Current assets
Inventories
13
643
1,186
Trade receivables
10
12,428
4,873
Other current assets
11
6,119
4,019
Restricted cash
14
57
70
Cash and cash equivalents
14
851
2,312
Total current assets
20,098
12,460
Assets classified as held for sale
12
175
11,189
Assets classified as held for distribution
19, 32
2,333
-
TOTAL ASSETS
65,866
69,878
25
Annual Report 2022
Consolidated statement of financial position
As of 31 December
All figures in USD 000's
Note
2022
2021
EQUITY
Shareholders' equity
Paid in capital
15
36,944
45,492
Currency translation reserve
-395
-407
Share options granted
15
595
192
Retained earnings
-8,404
-17,861
Total equity attributable to the parent
28,740
27,415
Non-controlling interests
1,075
930
TOTAL EQUITY
29,815
28,345
LIABILITIES
Non-current liabilities
Loans and borrowings non-current
18
-
7,559
Total non-current liabilities
-
7,559
Current liabilities
Trade payables
16
9,051
14,569
Contract liability
16
1,467
368
Other payables
16
7,773
10,049
Provisions
17
331
331
Loans and borrowings current
18
16,287
7,767
Tax liabilities
8
1,000
890
Total current liabilities
35,909
33,974
Liabilities classified as held for sale
-
-
Liabilities classified as held for distribution
19, 32
142
-
TOTAL LIABILITIES
36,051
41,533
TOTAL EQUITY AND LIABILITIES
65,866
69,878
26
Annual Report 2022
On 23 June 2023, the Board of Directors of SeaBird Exploration Plc authorized these consolidated financial statements for issue.
Ståle Rodahl – Executive Chairman
Hans Christian Anderson – Director
Øivind Dahl-Stamnes, Director
Nicholas Nunn, Director
Odd Sondre Svalastog Helsing, Director
27
Annual Report 2022
Consolidated statement of changes in equity
All figures in USD 000’s
Paid in
capital
Currency
translation
reserve
Share
options
granted
Retained
earnings
Non-
controlling
intrests
Total
equity
Equity as of 1 January, 2021
322,876
-407
444
-287,688
761
35,986
Profit/(Loss)
-10,839
-586
-11,425
Other comprehensive income
-
Total comprehensive income
-
-
-
-10,839
-586
-11,425
Share issue
3,617
3,617
Share premium reduction
-277,201
277,201
-
Share premium reduction – Green Minerals AS
shares
-3,800
-3,800
Transactions with non-controlling interest
3,425
755
4,180
Share options granted/cancelled
-252
-252
Other equity transactions
40
40
Total contributions by and distributions to owners
-277,384
-
-252
280,666
755
3,784
Equity as of 31 December 2021
45,492
-407
192
-17,861
930
28,345
Profit/(Loss) for the year
-12,244
-617
-12,861
Other comprehensive income for the year
-
Total comprehensive income for the year
-
-
-
-12,244
-617
-12,861
Share issue
12,651
12,651
Share premium reduction
-16,233
16,233
-
Share premium reduction – Green Minerals AS
shares
-4,966
4,966
-
Transactions with non-controlling interest
572
762
1,334
Share options granted/cancelled
403
403
Other equity transactions
-
12
-69
-
-57
Total contributions by and distributions to owners
-8,548
12
403
21,702
762
14,331
Equity as of 31 December 2022
36,944
-395
595
-8,404
1,075
29,815
28
Annual Report 2022
Consolidated statement of cash flow
Year ended 31 December
All figures in USD 000’s
Note
2022
2021
Cash flows from operating activities
Profit/(loss) before income tax
-11,712
-11,715
Adjustments for
Depreciation, amortization and impairment
7, 9, 12
8,601
6,787
Movement in provision
17
-
-65
Loss /(gain) from disposal of fixed assets
-260
807
Loss /(gain) from sale of shares
-
-256
Unrealized exchange (gain)/loss
482
-53
Interest expense on financial liabilities
24
1,588
619
Paid income tax
8
-
8
(Increase)/decrease in inventories
543
-556
(Increase)/decrease in trade receivables, contract assets and restricted cash
-9,641
3,391
Increase/(decrease) in trade payables, contract liability and other payables
-6,703
7,303
Increase/(decrease) in tax liabilities
110
-
Net cash used in operating activities
-16,992
6,270
Cash flows from investing activities
Capital expenditures
7
-3,895
-20,961
Proceeds from disposal of PPE
7, 12
9,586
304
Proceeds from sale of shares in subsidiary
-
369
Proceeds from sale of shares in third parties
-
451
Other long term investment
-
59
Net cash used in investing activities
5,691
-19,778
Cash flows from financing activities
Net proceeds from issuance of ordinary shares
15
12,651
7,104
Receipts from borrowings
18
11,501
6,903
Repayment of borrowings
18
-10,606
-
Interest paid
18
-1,551
-619
Other financing
-
-3,800
Net cash from financing activities
11,995
9,589
Net decrease in cash and cash equivalents
694
-3,919
Cash and cash equivalents at beginning of the period, unrestricted
14
157
6,231
Cash and cash equivalents at end of the period, unrestricted
14
851
2,312
Net increase in cash and cash equivalents from discontinued operation
-25
-
Cash and cash equivalents at beginning of the period in from discontinued
operation, unrestricted
2,155
-
Cash and cash equivalents at end of the period in discontinued operations,
unrestricted
2,130
-
29
Annual Report 2022
Notes to the consolidated financial statements
All figures in USD 1.000, if not stated otherwise. The consolidated financial statements and the separate financial statements are an integral
part of the annual financial statements and should be read in conjunction with each other.
1 General information
Seabird Exploration Plc (alone or together with its subsidiaries referred to as “SeaBird” or “company” or “Group”) is a global provider of
marine 2D seismic data for the oil and gas industry. SeaBird specializes in high quality operations within the high end of the 2D and source
vessel market. SeaBird concentrates on contract seismic surveys but is also selectively engaged in the multi-client sector. The main success
criteria for the Group are an unrelenting focus on quality, health, safety and environment (QHSE), combined with efficient collection of
high-quality seismic data.
The company was incorporated in the British Virgin Islands as a limited liability company in 2000. The company was re-domiciled to Cyprus
on 18 December 2009. Seabird has direct ownership in two vessels and the company is listed on Oslo Børs with ticker SBX. The company’s
registered address is at Panteli Katelari 16, Diagoras House floor 7, 1097, Nicosia, Cyprus. The Group main office is located in Bergen
(Norway) with the office address Sandviksbodene 68, 5035 Bergen. SeaBird Exploration Plc is tax resident in Norway and registered in the
corporate registers both in Norway and Cyprus.
At 31 December 2022, Seabird’s owned fleet consisted of the seismic vessels “Eagle Explorer” (Eagle) and “Fulmar Explorer” (Fulmar). The
Group sold one non-core vessel, the Petrel Explorer, in August 2022. In addition, the Group has a substantial pool of seismic equipment
which could be operated on chartered vessels. At year-end there were no chartered vessels in operation.
The accompanying consolidated and separate financial statements represent the activities of SeaBird for the year ended 31 December
2022 (the “period”). These consolidated and separate financial statements were authorized for issue by the board of directors on 23 June
2023.
2 Summary of significant accounting policies
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies
have been consistently applied to all years presented in these consolidated financial statements unless otherwise stated.
2.1 Basis of preparation
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap.113. The consolidated financial
statements have been prepared under the historical cost convention as modified by the revaluation of financial assets at fair value
through profit or loss. The preparation of financial statements also requires the use of assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Although these estimates are based on management’s best knowledge of current
events and actions, actual results may ultimately differ from those estimates. The areas involving a higher degree of judgment or
complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 4.
Going concern assumption
The assessment of going concern relies heavily on the ability of the Group to secure future cash inflows over the going concern assessment
period which extends through to a period of at least one year from the date of approval of the financial statements to meet their liabilities
as they become due. The following steps have been undertaken to allow Management to conclude on the appropriateness of the going
concern assumption:
a. Understand what could cause the Group not to be a going concern
b. Consider the current liquidity position, customer and sector position, market and operational risks and availability of additional
funding if required
c. Board review of the base case forecast produced by management
d. Perform reverse stress tests to assess under what circumstances going concern would become a risk – and assess the likelihood
of whether they could occur
e. Examine other mitigating actions to remedy the stress test scenarios
f. Conclude upon the going concern assumption
(a) Understand what could cause the Group not to be a going concern
30
Annual Report 2022
Notes to the consolidated financial statements
As at 31 December 2022 the Group had total current bank borrowings of USD15.7 million maturing in June 2023. On 8 June 2023 the Group
has signed a term sheet with the borrower, for the refinancing of the facility. The new terms set a revised repayment schedule and a final
repayment on 30 June 2026. (Note 32). The full loan amendment agreement is not yet executed.
Considering that a revised credit facility agreement is expected to be signed, the potential scenarios which could lead to the Group not
being a going concern are:
• Not having sufficient cash to meet liabilities as they fall due and therefore not being able to provide services to its customer base
and meet financing obligations. The main source of operating cash flows for the Group is the securing of employment for its
fleet. As of 31 December 2022 the Group was in a net current liability position of USD 15.8 million.
• A non-remedied breach of the financial covenants of Sparebank 1 SMN bank (Note 18) and failure to obtain a waiver. Under
the terms of the agreement this could lead to the outstanding balance becoming due for immediate repayment. These
covenants are:
✓ Minimum fee cash: USD 1 million
✓ Positive working capital excluding current portion of interest-bearing debt
✓ Equity ratio 45 % (The ratio has however been waived until end June 2023).
(b) Consider the current liquidity position, customer and sector position, market and operational risks and availability of additional
funding if required.
At 31 December 2022 unrestricted cash and cash equivalents amounted to USD 0.9 million, while total current assets amounted to USD
20.1 million. Please note that the an amount of USD 2.1 million, relate to cash and cash equivalents of Green Minerals AS, a subsidiary
entity owned by the Company at 50.9%, are reflected in “Assets classified as held for distribution” due to IFRS classifications requirements
(Note 2.3 (B)). Furthermore, an amount of USD 0.2 million relate to cash and cash equivalents of Seabird Exploration Private Limited, a 26%
owned joint venture in India, are reflected in the “Investment in associates” accounted for under the equity method of accounting.
As at 31 December 2022, the Group had Interest-bearing loans and borrowings of USD 16.3 million, current liabilities of USD 35.9 million and
current liabilities excluding interest bearing debt of USD 19.6 million. As at 31 December 2022, the Group’s total equity amounted to USD
29.8 million, despite incurring a loss of USD 12.9 million during the year.
The general market outlook continued to improve in 2023, with both tendering activity and rate level being higher now than were a year
ago. At the same time the seismic industry has gone through a momentous resetting where the fleet of active vessels has been reduced
by more than 50% and the number of players has been drastically reduced. Following the conversion of Fulmar Explorer in 2021
(completed early 2022) the company is well positioned to take advantage of the strong market. The attractiveness of the Group’s assets
is also reflected in the two significant contracts secured during the summer of 2022, which are still ongoing and materialized, with the
highest quarterly earnings reported by the Group in seven years, in the first quarter of 2023. Furthermore, the Eagle Explorer has recently
been awarded a new 55 days contract in Asia Pacific in direct continuation of the current contract. The new contract ends in August
2023. In addition to the above management is continuing its efforts in securing further future contracts.
If needed, the company may also attempt to raise liquidity through the stock exchange by utilizing equity market opportunities. This was
successfully applied on two occasions during 2022. The access to the public equity market does not exclude the possibility to dispose of
tangible fixed assets held by the company and delay scheduled investment programs and capital expenditure if required to ensure
additional liquidity. This was also implemented in 2022 through the sale of one non-core vessel with a substantial loan repayment effect.
(c) Board review of the base case forecast produced by management
The management has developed a base case cashflow forecast incorporating the most likely scenarios based on historic data and
contract activity. The following steps were taken by the Board to ensure the most accurate base case budget is prepared:
- The inputs and assumptions used in the base case cashflow forecast were compared to external market sources to ensure
reasonability.
- Inputs and assumptions were challenged through historic data.
- Reviewed the variance analysis between prior year projected cashflows versus actual cashflows.
- Compared employment rates to approved and prospective contracts.
- Challenged the cost base used for contracts.
- Ensured the base cashflow is updated with actual data from 2023.
- Examined different scenarios, their likelihood and impact on the Group.
- Reviewed the probability of signing new contracts, based on current negotiation developments.
- Obtained approval and confirmed the refinancing of its existing loan facilities.
31
Annual Report 2022
Notes to the consolidated financial statements
The main assumptions/facts used in the cash flow projections include the estimated EBITDA to be generated in 2023, the inclusion of cash
inflows relating to potential contracts and a successful extension of the bank facility with instalments in line with generated earnings. If
these assumptions are accurately estimated there should be no breach of covenants in the next twelve months and the Group will be
able to cover its short-term liabilities.
(d) Perform reverse stress tests to assess under what circumstances going concern would become a risk
The base case forecast model was further adjusted to establish at what point the Group may not be able to meet its obligations. The
Management has developed two stress test scenarios:
1. The first stress test scenario incorporates a reduced utilization or reduced contract rates by 20% on new employment. In its
assessment, the board considers availability of alternative sources of financing to mitigate the impact on liquidity, including
cost saving measures and tighter working capital control as a first response. The Group has contingency plans in place in case
of a prolonged stand-off, which will take the Group’s run-rate on cash costs down to a very low level, enabling it to handle a
period of low demand from the oil companies. Other measures, may include the realization of one of its vessels or part of its
seismic pool equipment or asset-backed financing arrangements, are also considered possible. This scenario may increase the
risk of being non-compliant with the bank covenants.
2. The second stress test scenario includes only the signed contracts up to the signing date of the financial statements. The
Group’s future cash inflows are dependent upon the income to be generate from secured contracts. If no new contracts are
signed in the next 12 months the Group may be forced to dispose portion of its assets and repay its short term obligations as
they fall due. The Group is in a net asset position of USD 28.9 million and the recoverable value of its two vessels is higher than
their carrying values. An active market exists and Management is of the opinion that, in this case scenario, the Group will be
able to proceed with the sale at the desirable amount.
(e) Examine other mitigating actions to remedy the stress test scenarios.
- Diversification of operations
- Alternative credit funding sources
- The Group is listed in the Oslo Stock Exchange and has access to funds from shareholders, if needed.
- As per above this tool was applied successfully twice during 2022; the latest share issue in July 2022 was substantially
oversubscribed indicating the general interest to invest in the seismic market and the Group.
(f) Conclude upon the going concern assumption
The above matters constitute a material uncertainty that may cast significant doubt over the Group’s ability to continue as a going
concern. However, Management determined that the actions taken so far and the available options are sufficient to mitigate the
uncertainty and has therefore prepared the consolidated and stand-alone financial statements on a going concern basis.
2.2 Adoption of new or revised standards and interpretations
There were no changes in accounting principles and no new IFRS standards, amendments or interpretations that have been up for
adoption in 2022.
New standards, amendments, IFRSs or IFRIC interpretations for annual reporting periods after 31st of December 2022 are expected to not
be significant for the Group’s financial statements going forward.
2.3 Consolidation
(A) Subsidiaries
The consolidated financial statements incorporate the financial statements of the company and entities (including structured entities)
controlled by the company (its “subsidiaries”).
Control is achieved when the company:
- has power over the investee;
- is exposed, or has rights, to variable returns from its involvement with the investee; and
- has the ability to use its power to affect its returns.
The company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more
of the three elements of control listed above.
32
Annual Report 2022
Notes to the consolidated financial statements
When the company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are
sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally.
Subsidiaries are fully consolidated from the date on which control is transferred to SeaBird. They are de-consolidated from the date that
control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by SeaBird. The cost of an
acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of
exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially
at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the
fair value of SeaBird’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair
value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement.
Inter-company transactions, balances and unrealized gains on transactions between SeaBird companies are eliminated. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by SeaBird. For a complete
listing of subsidiaries please refer to note 19.
(B) Non-controlling interests (minority interests)
In 2020 Green Minerals AS with its main office in Bergen, Norway was recognized as a new subsidiary in the Group. The Group has minority
interests (non-controlling interests) in this subsidiary and therefore the Group shall present non-controlling interests in the consolidated
statement of financial position within equity, separately from the equity of the owners of the parent.
Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are equity
transactions (meaning transactions with owners in their capacity as owners).
For more information regards to non-controlling interest see note 19.
If the Group loses control of a subsidiary with non-controlling interest;
- the Group derecognizes the assets and liabilities of the former subsidiary from the consolidated statement of financial position
- Recognizes any investment retained in the former subsidiary at its fair value when control is lost and subsequently accounts for it
and for any amounts owed by or to the former subsidiary in accordance with relevant IFRSs. That fair value shall be regarded as
the fair value on initial recognition of a financial asset in accordance with IFRS 9 or, when appropriate, the cost on initial
recognition of an investment in an associate or joint venture.
- recognizes the gain or loss associated with the loss of control attributable to the former controlling interest
Green Minerals AS was decided to be distributed to SeaBird’s shareholder in 2022, and as such has been recognized as discontinued
operation in the annual accounts. The distribution was completed 25 January 2023.
2.4 Segment reporting
A segment is a distinguishable component of the Group that is engaged in providing related services (business segment), or in providing
services within a particular economic environment (geographical segment), which is subject to risks and returns that are different from
those of other segments. The Group has one business segment. The CEO of the Group is considered to be the Chief Operating Decision
Maker.
2.5 Foreign currency translation
(A) Presentation currency
The consolidated financial statements are presented in US dollars, which is also the company’s functional currency.
(B) Transactions and balances
Foreign currency transactions are translated into the presentation currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognized in the income statement. Foreign exchange gains and losses arising from financing activities are recognized in finance costs
while all other foreign exchange gains and losses are recognized in their individual line items.
(C) Seabird companies
The results and financial position of all the SeaBird entities that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
I. assets and liabilities for each balance sheet item are translated at the closing rate at the date of that balance sheet;
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Notes to the consolidated financial statements
II. income and expenses are translated at average exchange rates during the year (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses
are translated at the dates of the transactions); and
III. all resulting exchange differences are recognized as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to shareholders’
equity. When a foreign operation is sold, exchange differences that were recorded in equity are recognized in the income statement as
part of the gain or loss on sale.
2.6 Interests in joint operations and associates
Joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and
obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
When a group entity undertakes its activities under joint operations, the Group as a joint operator recognizes in relation to its interest in a
joint operation:
- its assets, including its share of any assets held jointly;
- its liabilities, including its share of any liabilities incurred jointly;
- its revenue from the sale of its share of the output arising from the joint operation;
- its share of the revenue from the sale of the output by the joint operation; and
- its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenue and expenses relating to its interest in a joint operation in accordance with the IFRS
Standards applicable to the particular assets, liabilities, revenue and expenses.
When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a sale or contribution of assets),
the Group is considered to be conducting the transaction with the other parties to the joint operation, and gains and losses resulting from
the transactions are recognized in the Group’s consolidated financial statements only to the extent of other parties’ interests in the joint
operation.
When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a purchase of assets), the Group
does not recognize its share of the gains and losses until it resells those assets to a third party.
The Group’s multi-client projects presented in these financial statements joint control arrangements accounted for as joint operations.
Associates
Associates are entities over which the consolidated entity has significant influence but not control or joint control. Investments in associates
are accounted for using the equity method. Under the equity method, the share of the profits or losses of the associate is recognised in
profit or loss and the share of the movements in equity is recognised in other comprehensive income. Investments in associates are carried
in the statement of financial position at cost plus post-acquisition changes in the consolidated entity's share of net assets of the associate.
Goodwill relating to the associate is included in the carrying amount of the investment and is neither amortised nor individually tested for
impairment. Dividends received or receivable from associates reduce the carrying amount of the investment.
When the consolidated entity's share of losses in an associate equal or exceeds its interest in the associate, including any unsecured long-
term receivables, the consolidated entity does not recognise further losses, unless it has incurred obligations or made payments on behalf
of the associate.
The consolidated entity discontinued the use of the equity method upon the loss of significant influence over the associate and recognises
any retained investment at its fair value. Any difference between the associate's carrying amount, fair value of the retained investment
and proceeds from disposal is recognised in profit or loss.
2.7 Property, plant and equipment
Property, plant and equipment comprise mainly vessels and seismic equipment on board owned or chartered vessels. Vessels, seismic
equipment designated for source and 2D operation and office equipment are carried at historical cost, less accumulated depreciation
and impairment.
Cost represents either the purchase price or the fair value at the time of acquisition if the purchase was through a business combination.
Certain expenditures for conversions and major improvements are also capitalized if they appreciably extend the life or increase the
earning capacity of a vessel. Elements of cost include costs that are directly attributable to the improvement or conversion project but
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Annual Report 2022
Notes to the consolidated financial statements
not administration and other general overhead costs. Subsequent costs are included in the asset’s carrying amount or recognized as a
separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and
the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the
financial period in which they are incurred.
Depreciation on property, plant and equipment is calculated on a straight-line basis (historical cost less residual value) over their estimated
useful lives, as follows:
- Vessels: Up to 25 years
- Conversion expenditures: Vessels remaining life
- Seismic equipment (immovable): Vessels remaining life
- Seismic equipment (movable): 3 to 8 years
- Office equipment: 3 years
The vessels are depreciated from the date they are available for use, i.e. when they are in the location and condition necessary for them
to be capable of operating in the manner intended by management. Costs for special periodic and class renewal surveys (dry-docking)
are capitalized and depreciated over the estimated period between surveys. When special periodic and class renewal surveys occur the
part of the fixed assets register that is replaced is derecognized. Other maintenance and repair costs are expensed as incurred. The
assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is derecognized upon disposal or when no future economic benefits are expected to arise from the continued
use of the asset. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included under
“Gain/(loss) on sale of property, plant and equipment” in the income statement.
Property, plant and equipment under construction or under conversion are recognized at cost less impairment. Elements of cost include
costs that are directly attributable to the conversion project but not administration and other general overhead costs.
2.8 Intangible assets
(A) Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated
impairment losses. Amortization is recognized on a straight‑line basis over their estimated useful lives. The estimated useful life and
amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for
on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated
impairment losses.
(B) Internally‑generated intangible assets – research and development expenditure
Expenditure on research activities is recognized as an expense in the period in which it is incurred. An internally‑generated intangible asset
arising from development (or from the development phase of an internal project) is recognized if, and only if, all of the following conditions
have been demonstrated:
- the technical feasibility of completing the intangible asset so that it will be available for use or sale;
- the intention to complete the intangible asset and use or sell it;
- the ability to use or sell the intangible asset;
- how the intangible asset will generate probable future economic benefits;
- the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset; and
- the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognized for internally‑generated intangible assets is the sum of the expenditure incurred from the date when the
intangible asset first meets the recognition criteria listed above. Where no internally‑generated intangible asset can be recognized,
development expenditure is recognized in profit or loss in the period in which it is incurred. Subsequent to initial recognition,
internally‑generated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the
same basis as intangible assets that are acquired separately.
(C) De-recognition of intangible assets
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses
arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying
amount of the asset, and are recognized in profit or loss when the asset is derecognized.
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Notes to the consolidated financial statements
Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment
losses. Intangible assets with finite lives are amortized over the useful economic lives based on straight line amortization. Useful lives and
amortization method for intangible assets with finite useful life are reviewed at least annually. Gains and losses arising from de-recognition
of an intangible asset are measured at the difference between the net sales proceeds and the carrying amount of the asset and are
reported as “other income (expenses), net” in the income statement as part of operating profit.
The company currently owns no intangible assets other than multi-client investments, which are described below.
(D) Multi-client library
The multi-client library consists of seismic data surveys to be licensed to customers on a non-exclusive basis. Costs directly incurred in
acquiring, processing and otherwise completing multi-client seismic surveys, including depreciation and mobilization costs, are capitalized
to the multi-client library.
Generally, each multi-client survey is amortized in a manner that reflects the pattern of consumption of its economic benefits.
Upon completion of data processing and delivery to the prefunding customers and those contracted during the work in progress phase,
amortization is recognized based on total costs versus forecasted total revenues of the project.
Thereafter, a straight-line amortization is applied over the project's remaining useful life, which for most projects is estimated to be four
years. The straight-line amortization is distributed evenly through the financial years, independently of sales during the quarters.
Whenever there is an indication that a survey may be impaired, an impairment test is performed in accordance with the policy described
in note 2.9. A systematic impairment test of all surveys is performed at least annually at the end of the financial year.
2.9 Impairment of non-financial assets
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating
units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation
basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and
whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows
are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or
cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced
to its recoverable amount. An impairment loss is recognized in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognized for the asset (cash-generating unit) in prior years. A reversal of an impairment
loss is recognized in profit or loss.
2.10 Non-current assets held for sale
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying amount and fair value less costs
to sell.
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction
rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal
group) is available for immediate sale in its present condition. Management must be committed to the sale which should be expected
to qualify for recognition as a completed sale within one year from the date of classification.
Property, plant and equipment and intangible assets are not depreciated or amortized once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position.
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Notes to the consolidated financial statements
2.11 Financial assets and financial liabilities
Financial assets and financial liabilities are recognized in the Group’s balance sheet when the Group becomes a party to the contractual
provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value and are subsequently held at fair
value or amortized cost based on the classification provisions described below.
2.11.1 Financial assets - classification
The Group classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other comprehensive income “OCI” or through profit or loss), and
- those to be measured at amortized cost
The classification and subsequent measurement of debt financial assets depends on: (i) the Group's business model for managing the
related assets portfolio and (ii) the cash flow characteristics of the asset.
In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash flows
that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI
test and is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The
business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the
market place (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
For purposes of subsequent measurement, financial assets are classified in four categories:
- Financial assets at amortized cost (debt instruments)
- Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
- Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon de-recognition (equity
instruments)
- Financial assets at fair value through profit or loss
Financial assets at amortized cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at amortized cost if both of the following conditions
are met:
- The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows,
and
- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment.
Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.
The Group’s financial assets at amortized cost includes trade receivables, cash and cash equivalents and restricted cash.
Financial assets at fair value through OCI (debt instruments)
The Group measures debt instruments at fair value through OCI if both of the following conditions are met:
- The financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling,
and
- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or reversals are
recognized in the statement of profit or loss and computed in the same manner as for financial assets measured at amortized cost. The
remaining fair value changes are recognized in OCI. Upon de-recognition, the cumulative fair value change recognized in OCI is recycled
to profit or loss.
The Group does not hold any debt instruments at fair value through OCI.
Financial assets designated at fair value through OCI (equity instruments)
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Notes to the consolidated financial statements
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair value
through OCI. The classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognized as other income in the statement
of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of
part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through
OCI are not subject to impairment assessment. The Group does not hold any equity instruments at fair value through OCI.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial
recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are
classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including
separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments.
Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through
profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at
fair value through OCI, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition
if doing so eliminates, or significantly reduces, an accounting mismatch.
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair
value recognized in the statement of profit or loss.
This category includes the listed debt investment and the non-listed equity investment shown within the line long-term investments.
2.11.2 De-recognition of financial assets
Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred
and the Group has transferred substantially all the risks and rewards of ownership.
On de-recognition of a financial asset in its entirety, the difference between the carrying amount (measured at the date of de-
recognition) and the consideration received (including any new asset obtained less any new liability assumed) shall be recognized in
profit or loss.
2.11.3 Financial assets: impairment and credit loss allowance for ECL
The Group assesses on a forward looking basis the ECL for debt instruments (including loans) measured at amortized cost and FVOCI and
with the exposure arising from loan commitments and financial guarantee contracts. The Group measures ECL and recognizes credit loss
allowance at each reporting date. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined
by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available
without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of the loss is recognized
in profit or loss.
Debt instruments measured at amortized cost are presented in the consolidated statement of financial position net of the allowance for
ECL.
For debt instruments at FVOCI, an allowance for ECL is recognized in profit or loss and it affects fair value gains or losses recognized in OCI
rather than the carrying amount of those instruments.
Expected losses are recognized and measured according to one of two approaches: general approach or simplified approach.
For trade receivables including trade receivables with a significant financing component and contract assets and lease receivables the
Group applies the simplified approach permitted by IFRS 9, which uses lifetime expected losses to be recognized from initial recognition
of the financial assets.
For all other financial asset that are subject to impairment under IFRS 9, the Group applies the general approach. The Group applies a
three stage model for impairment, based on changes in credit quality since initial recognition. A financial instrument that is not credit
impaired on initial recognition is classified in Stage 1.
Financial assets in Stage 1 have their ECL measured at an amount equal to the portion of lifetime ECL that results from default events
possible within the next 12 months or until contractual maturity, if shorter (''12 months ECL''). If the Group identifies a significant increase in
credit risk (''SICR'') since initial recognition, the asset is transferred to Stage 2 and its ECL is measured based on ECL on a lifetime basis, that
is, up until contractual maturity but considering expected prepayments, if any (''Lifetime ECL''). If the Group determines that a financial
asset is credit impaired, the asset is transferred to Stage 3 and its ECL is measured as a Lifetime ECL.
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Annual Report 2022
Notes to the consolidated financial statements
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group compares the
risk of a default occurring on the financial instrument at the reporting date with the risk of a default occurring on the financial instrument
at the date of initial recognition. In making this assessment, the Group considers both quantitative and qualitative information that is
reasonable and supportable, including historical experience and forward-looking such as the future prospects of the oil and gas industry
in which the Group’s debtors operate.
Despite the foregoing, the Group assumes that the credit risk on a financial instrument has not increased significantly since initial
recognition if the financial instrument is determined to have low credit risk at the reporting date. A financial instrument is determined to
have low credit risk if the financial instrument has a low risk of default, the debtor has a strong capacity to meet its contractual cash flow
obligations in the near term, and adverse changes in economic and business conditions in the longer term may, but will not necessarily,
reduce the ability of the counterparty to fulfil its contractual cash flow obligations. The Group considers a financial asset to have low
credit risk when the asset has external credit rating of ‘investment grade’ in accordance with the globally understood definition or if an
external rating is not available, the asset has an internal rating of ‘performing’. Performing means that the counterparty has a strong
financial position and there is no past due amounts.
The Group considers a financial asset in default when internal or external information indicates that the Group is unlikely to receive the
outstanding contractual amounts in full.
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that
financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about events such as:
significant financial difficulty of the issuer or the borrower; a breach of contract, such as a default or past due event; it is becoming
probable that the borrower will enter bankruptcy or other financial reorganization; or the disappearance of an active market for that
financial asset because of financial difficulties.
2.11.4 Reclassification of financial assets
Financial instruments are reclassified only when the business model for managing those assets changes. The reclassification has a
prospective effect and takes place from the start of the first reporting period following the change.
2.11.5 Financial assets write off
Financial assets are written off, in whole or in part, when the Group exhausted all practical recovery efforts and has concluded that there
is no reasonable expectation of recovery. The write off represents a de-recognition event. The Group may write off financial assets that
are still subject to enforcement activity when the Group seeks to recover amounts that are contractually due, however, there is no
reasonable expectation of recovery.
2.11.6 Financial liabilities measurement categories
Financial liabilities are initially recognized at fair value and classified as subsequently measured at amortized cost, except for (i) financial
liabilities at FVTPL: this classification is applied to derivatives, financial liabilities held for trading (e.g. short positions in securities), contingent
consideration recognized by an acquirer in a business combination and other financial liabilities designated as such at initial recognition
and (ii) financial guarantee contracts and loan commitments.
The Group’s financial liabilities are classified as subsequently measured at amortized cost.
Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost.
Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period
of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition, construction or production
of a qualifying asset, in which case they are capitalized as part of the cost of that asset. Borrowings are classified as current liabilities,
unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the consolidated statement
of financial position date.
2.11.7 De-recognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. The difference between
the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.
When the Group exchanges with the existing lender one debt instrument into another one with the substantially different terms, such
exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly,
the Group accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial
liability and the recognition of a new liability. In determining whether a modification of terms of a liability is a substantial modification, the
Group considers quantitative and qualitative factors. It is assumed that the terms are substantially different if the discounted present value
of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective rate
is at least 10 per cent different from the discounted present value of the remaining cash flows of the original financial liability. If the
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Annual Report 2022
Notes to the consolidated financial statements
modification is not substantial, the difference between: (1) the carrying amount of the liability before the modification; and (2) the present
value of the cash flows after modification, is recognized in profit or loss as the modification gain or loss.
2.12 Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. The Group’s
inventories comprise of fuel and lube oils.
2.13 Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments.
2.14 Share capital
Ordinary share capital is classified as equity. The difference between the fair value of the consideration received by the company and
the nominal value of the share capital issued is taken to the share premium account.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds.
Where and if any group company purchases the parent company’s equity share capital (treasury shares), the consideration paid,
including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to the Group’s equity
holders until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received (net of any
directly attributable incremental transaction costs and the related income tax effects) is included in equity attributable to the Group’s
equity holders.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services
received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity
instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. For more information see
note 15.
2.15 Current and deferred tax
The tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement, except to the extent that
it relates to items recognized directly in equity. In this case, the tax is also recognized in equity. The current income tax charge is calculated
on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where SeaBird operates and
generates taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject
to interpretation. SeaBird establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements.
However, the deferred income tax, if it is not accounted for, arises from initial recognition of an asset or liability in a transaction other than
a business combination that at the time of the transaction affects neither accounting, nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet
date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilized. Deferred income tax is provided on temporary differences arising on investments in subsidiaries
and associates, except where the timing of the reversal of the temporary difference is controlled by SeaBird and it is probable that the
temporary difference will not reverse in the foreseeable future.
2.16 Employee benefits and share based payments
(A) Pension obligations
SeaBird operates various defined contribution plans under which it pays fixed contributions into a separate entity. The Group has no further
payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they
are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is
available.
(B) Share-based compensation
Equity-settled, share-based compensation plans, under which the Group receives services from employees as consideration for SeaBird
equity instruments (options) is booked as an expense. The total amount to be expensed over the vesting period is determined by reference
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Annual Report 2022
Notes to the consolidated financial statements
to the fair value of the options granted, excluding the impact of any nonmarket vesting conditions (for example, profitability and sales
growth targets).
Nonmarket vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance sheet
date, the entity revises its estimates of the number of options that are expected to vest. It recognizes the impact of the revision of original
estimates, if any, in the income statement, with a corresponding adjustment to equity. The proceeds received net of any directly
attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.
The entity may modify the terms of an existing equity instrument granted in a share-based payment transaction. As a minimum, the services
received are measured at the grant date fair value, unless the instruments do not vest because of a failure to satisfy a non-market vesting
condition that was specified at grant date. This applies irrespective of any modifications to the terms and conditions on which the
instruments were granted (including cancellation or settlement). In addition, the effects of modifications that increase the total fair value
of the share-based payment arrangement, or are otherwise beneficial to the employee, are recognized. A modification that results in a
decrease in the fair value of equity instruments does not result in a reduction in the expense recognized in future periods. When the
modification increases the fair value of the equity instruments granted, the incremental fair value is measured by comparing the fair value
of the instrument immediately before and immediately after the modification. This incremental fair value is then included in the
measurement of the amount recognized for services received. If the modification occurs during the vesting period, the incremental fair
value granted is included in the measurement of the amount recognized for services received over the period from the modification date
until the date when the modified equity instruments vest. The amount based on the grant date fair value of the original equity instruments
continues to be recognized over the remainder of the original vesting period. If the modification occurs after vesting date, the incremental
fair value granted is recognized immediately. If the modification increases the number of equity instruments granted, the fair value of the
additional equity instruments granted, measured at the date of the modification, is included in the measurement of the amount
recognized for services received.
The cancellation or settlement of an equity instrument is accounted for as an acceleration of vesting. The amount that would otherwise
have been recognized for services received over the remainder of the vesting period is, therefore, recognized immediately. If new equity
instruments are granted to an employee in connection with the cancellation of existing equity instruments, and they are identified, on the
date when they are granted, as replacement equity instruments for the cancelled equity instruments, this is accounted for as a
modification of the original equity instruments. The incremental fair value granted is the difference between the fair value of the
replacement equity instruments and the net fair value of the cancelled equity instruments at the date the replacement equity instruments
are granted. The net fair value of the cancelled equity instruments is their fair value, immediately before the cancellation, less the amount
of any payment made to the employee that is accounted for as deduction from equity. If the entity does not identify new equity
instruments granted as replacement equity instruments for those cancelled, the new equity instruments are accounted for as a new grant.
2.17 Provisions
Provisions are recognized when SeaBird has a present legal or constructive obligation as a result of past events, it is more likely than not
that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the reporting
date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows
estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value
of money is material), using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the
obligation. The increase in the provision due to passage of time is recognized as interest expense.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable
is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured
reliably.
A restructuring provision is recognized when the Group has developed a detailed formal plan for the restructuring and has raised a valid
expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to
those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring,
which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the
entity.
Onerous leases are contracts where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits
expected to be received under it. Provision is made in respect of onerous contracts for the present obligation under the contract. Where
there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the
class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the
same class of obligations may be small.
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Notes to the consolidated financial statements
2.18 Revenue recognition
Revenues for contracts with customers arise primarily from (i) proprietary seismic services (2D exclusive surveys performed in accordance
with customer specifications) and (ii) granting of licenses to the Group’s multi-client library. Source contracts of seismic vessels and time-
charter contracts of maritime vessels under which a vessel is chartered-out to the customer for a specific period are accounted for as
leases (refer to note 2.19)
Revenue is recognized at the amount that the Group expects to be entitled in exchange for transferring the promised services to the
customer (the ‘transaction price’). The Group includes in the transaction price an amount of variable consideration (for example,
additional consideration related to a “variation order”) only to the extent that it is probable that a significant reversal will not occur when
the associated uncertainly is resolved. Revenue is shown net of value-added tax, discounts, and after eliminating sales within the Group.
Revenue is recognized when it is probable that the Group will collect the consideration to which it will be entitled and when specific
criteria have been met under the contract. In evaluating whether collectability is probable, the Group considers only the customer’s
ability and intention to pay.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases of
decreases in estimates are reflected in the profit or loss in the period in which the circumstances become known to the management.
The principles applied for each of the main types of contracts with customers are described in more detail below:
Identification of performance obligations
The Group assesses whether a contract contains one or more performance obligations (that is, distinct promises to provide a service) and
allocates the transaction price to each performance obligation on the basis of its standalone selling price. The proprietary 2D contracts
(that do not include data processing service), are generally considered to have a single performance obligation. The service related to
seismic data processing, which is occasionally agreed in contracts with customers, is typically considered to be a separate performance
obligation.
Timing of revenue recognition in proprietary seismic services
Revenue from proprietary seismic services (2D contracts) is recognized over time as the services are performed and the Group is entitled
to the compensation under the contract for the work performed. The performance obligation is considered to be satisfied over time
because the Group performs the service at the customer specification, the resulting data is owned by the customer the Group is entitled
to payment at any given point in time for the portion of work performed and the Group has no alternative right to otherwise use or benefit
from the resultant data. Revenue is recognized based on the actual service provided to the end of the reporting period as a proportion
of the total services to be provided. The percentage of completion is measured with reference to the actual cost (cost per day multiplied
by days lapsed) to total expected costs (cost per day multiplied by expected project days).
Timing of revenue recognition in multi-client sales (licensing)
Multi-client late sales: Revenue from granting a license to a customer to use a specifically defined portion of the multi-client library is
recognized at the “point in time” when the customer has received the underlying data or has the right to access the licensed portion of
the data.
Multi-client prefunding sales: The Group ordinarily obtains funding from customers before a multi-client survey project is completed. All
invoices to clients during work-in-progress phase are booked as contract liabilities. Revenue is recognized at the point in time when the
“right to use” license is transferred to the customer. This “point in time” depends on the specific contract, but is typically upon completion
of processing of the survey and granting of access to the finished data or delivery of the finished data.
Timing of revenue recognition in source contracts and time-charter contracts
Revenue from source contracts and time-charter contracts is recognized in accordance with the lessor accounting policies (note 2.19).
Typically, source contracts and time-charter contracts are classified as operating leases and hire income is recognized on a straight-line
basis over the term of the relevant lease.
Financing component
The Group typically does not have any contracts where the period between the delivery of the service and payment by the customer
exceeds one year. Consequently, the Group elects to use the practical expedient and does not adjust any of the transaction prices for
the time value of money.
Contract assets and contract liabilities
In case the services rendered by the Group as of the reporting date exceed the payments made by the customer as of that date and
the Group does not have the unconditional right to charge the client for the services rendered (that is, the Group has earned ‘unbilled
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Annual Report 2022
Notes to the consolidated financial statements
revenue’), a contract asset is recognized. The Group assesses a contract asset for impairment in accordance with IFRS 9 using the
simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the contract
asset. An impairment of a contract asset is measured, presented and disclosed on the same basis as a financial asset that is within the
scope of IFRS 9 (see note 2.11.3).
If the payments made by a customer exceed the services rendered under the relevant contract, a contract liability is recognized. The
Group recognizes any unconditional rights to consideration separately from contract assets as a trade receivable because only the
passage of time is required before the payment is due.
Costs to obtain or fulfil contracts with customers
The Group can recognize the incremental costs incurred by the Group to obtain contracts with customers and the costs incurred in fulfilling
contracts with customers that are directly associated with the contract as an asset, if such costs meet the following recognition criteria:
- Incremental costs of obtaining contracts are those costs that the Group incurs to obtain a contract with customer that would not
have been incurred if the contract had not been obtained.
- Costs to fulfil a contract are those that (a) relate directly to the contract, (b) generate or enhance resources of the Group that will
be used in satisfying performance obligations, and (c) the costs are expected to be recovered.
The Group accounts for the mobilization costs incurred to transfer the vessel to the intended contract area as “costs to fulfil a contract” if
they meet the above criteria and recognizes the costs as an asset on the balance sheet, classified within “other current assets”. The asset
is amortized on a straight-line basis over the term of the specific contract it relates to, consistent with the pattern of recognition of the
associated revenue and recognized in “cost of sales” in the profit or loss. Additionally, the asset is assessed for impairment under the
expected credit loss provisions and any impairment loss is recognized in “cost of sales” in profit or loss.
The Group recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset
that the Group otherwise would have recognized is one year or less.
2.19 Leases
The Group as a lessee
The Group assesses whether a contract is or contains a lease, at inception of the contract.
The Group enters into lease agreements as a lessee with respect to its vessels chartered-in, the Group’s office premises, as well as rentals
of office equipment. The Group recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements
in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value
assets (such as small items of office equipment). For these leases, the Group recognizes the lease payments as an operating expense on
a straight- line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic
benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the lessee uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
- Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
- Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
- The amount expected to be payable by the lessee under residual value guarantees;
- The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
- Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the consolidated statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective
interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group re-measures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
- The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of
exercise of a purchase option, in which case the lease liability is re-measured by discounting the revised lease payments using a
revised discount rate.
- The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual
value, in which cases the lease liability is re-measured by discounting the revised lease payments using an unchanged discount rate
(unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
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Annual Report 2022
Notes to the consolidated financial statements
- A lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the lease liability is
re-measured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate
at the effective date of the modification.
The Group did not make any such adjustments during the current year.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the
commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lessee transfer’s
ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the
related right-of-use asset is depreciated over the useful life of the underlying asset.
The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the consolidated statement of financial position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as
described in the ‘Property, Plant and Equipment’ policy (see note 2.7).
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use asset.
The related payments are recognized as an expense in the period in which the event or condition that triggers those payments occurs
and are recognized in profit or loss, classified within "Cost of sales" if related to rental of vessels or in "Selling, general and administrative
expenses" if related to rental of office space or office equipment.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and
associated non-lease components as a single arrangement. The Group has used this practical expedient.
The Group as lessor
The Group enters into lease agreements as a lessor with respect to its vessels chartered-out under source contracts.
Leases for which the Group is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially
all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating
leases.
When the Group is an intermediate lessor, it accounts for the head lease and the sublease as two separate contracts. The sublease is
classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.
Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred
in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line
basis over the lease term.
Amounts due from lessees under finance leases are recognized as receivables at the amount of the Group’s net investment in the leases.
Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment
outstanding in respect of the leases.
When a contract includes lease and non-lease components, the Group applies IFRS 15 to allocate the consideration under the contract
to each component.
2.20 Dividend distribution
Dividend distribution to the Group’s shareholders is recognized as a liability in SeaBird’s financial statements in the period in which the
dividends are approved by the Board of Directors.
2.21 Comparatives
The Group made no reclassifications in 2021.
2.22 Contingent assets and liabilities
Contingent assets are not recognized in the financial statements but are disclosed in the notes to the financial statements where an inflow
of economic benefits is probable. Contingent liabilities are defined as:
- possible obligations resulting from past events, and whose existence will be confirmed only by the occurrence or non‑occurrence of
one or more uncertain future events not wholly within the control of the entity;
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Annual Report 2022
Notes to the consolidated financial statements
- a present obligation that arises from past events but is not recognized because:
(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation;
or
(ii) the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not reported in the financial statements, with the exception of contingent liabilities which originate from business
combinations. For more information see note 27.
2.23 Contract costs
Costs incurred relating to future performance obligations are deferred and recognized as assets in the consolidated statement of financial
position.
The nature of the asset is incremental costs of obtaining a contract that would not have incurred if the contract had not been obtained
and will be recovered by the revenue over the contract period.
Costs related to contracts and future performance obligation longer than 12 months are classified and presented as other non-current
assets. All other costs for future performance are presented as other current assets.
Contract costs incurred will be expensed and presented as Operational expenses (cost of sales) in line with the satisfaction of the
performance obligation.
2.24 Costs to fulfil a contract
If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard the company recognizes an asset
from the costs incurred to fulfil a contract if those costs meet all of the following criteria:
(a) the costs relate directly to a contract or to an anticipated contract that the company can specifically identify);
(b) the costs generate or enhance resources of the entity that will be used in satisfying (or in continuing to satisfy) performance obligations
in the future; and
(c) the costs are expected to be recovered
Costs related to mobilization of vessels are capitalized under other current assets and amortized over the contract period when the above
criteria are satisfied.
3 Risk factors and financial risk management
3.1 Financial risk factors
SeaBird’s activities are exposed to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk
and liquidity risk. The Group’s overall risk management focuses on the unpredictability of financial markets and monitors and controls risks
with a potential significant negative effect for the Group and evaluates to minimize the risks if the cost of doing so is acceptable. The
Group may use derivative financial instruments to hedge certain risk exposures from time to time. This note presents information about the
Group’s exposure to each of the above risks, the Group’s objectives, policies and procedures for measuring and managing risk, and the
Group’s management of capital. Further quantitative disclosures are included in note 30. The board of directors has overall responsibility
for the establishment and oversight of the Group’s risk management framework. The audit committee oversees how management
monitors and manages risk and review the adequacy of the risk management framework in relation to the risks faced by SeaBird.
(A) Market risk
(I) Currency exchange risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. The Group’s
operating cash inflows are derived from its seismic activities, which are mostly priced in U. S. dollar whilst vessels’ costs and crew costs are
also mostly in U.S. dollar, thus creating a natural hedge. Nevertheless, as the Group operates internationally, it undertakes transactions
denominated in foreign currencies, in particular with regards to taxation payments, as well as administrative expenses. Consequently, the
Group is exposed to foreign exchange risk, primarily with respect to Norwegian kroner, Euro, Singapore Dollar, and British Pound. To
manage foreign exchange risk arising from future commercial transactions and recognized assets and liabilities, the Group’s
management monitors the currency rate fluctuations continuously and entities in the Group may use from time to time various foreign
exchange contracts. SeaBird did not have any open foreign exchange contracts as at 31 December 2022 and 2021. Quantitative
information regarding the Group’s exposure to foreign exchange risk as at year end is set out in note 30.
(II) Interest rate risk
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Annual Report 2022
Notes to the consolidated financial statements
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. Variable interest
rates expose the Group to cash flow interest rate risk, while fixed interest rates expose the Group to fair value interest rate risk. The Group’s
income and operating cash flows are substantially independent of changes in market interest rates as the Group has no significant interest
bearing assets. The Group has a loan in Sparebank 1 SMN, see note 18. The management monitors the interest rate fluctuations on a
continuous basis and acts accordingly. Quantitative information regarding the Group’s exposure to interest rate risk as at year end is set
out in note 30.
(B) Credit risk
The company sells its services solely to participants in the energy industry, which may increase the Group’s overall exposure to credit risk
as customers may be similarly affected by prolonged industry downturns. SeaBird has policies in place to ensure that sales of services are
made to customers with an appropriate credit history. When contracts are made with counterparties that are considered particularly
risky, the company normally dictates short payment terms and upfront payments in contractual arrangements with the client to properly
mitigate credit risk. Still, the Group faces the risk of non-payment from customers.
Credit risk also arises from cash and cash equivalents, deposits with financial institutions as well as contract assets and contract costs.
SeaBird seeks to limit the amount of credit exposure to any financial institution and is only investing in liquid securities with counterparties
with strong credit ratings. The Group’s policy is to provide financial guarantees only to wholly-owned subsidiaries or performance
guarantees and similar in the normal course of business.
Note 30 details the Group’s maximum exposure to credit risk and the measurement bases used to determine expected credit losses.
(C) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an
adequate amount of available debt funding and the ability to close out market positions. Due to the cyclical nature of the seismic industry,
SeaBird has been aiming to maintain flexibility in funding by a mixture of debt and equity financing. Quantitative information about the
Group’s exposure to liquidity risk is set out in note 30.
(D) Risks related to debt arrangements
SeaBird’s current and future debt arrangements may include covenants and undertakings of a general, financial and technical nature
and such debt arrangements may contain cross-default provisions. Failure by the Group to meet any of the covenants, undertakings
and/or a failure to repay debt instalments falling due could result in all outstanding amounts under the different debt arrangements
becoming immediately due for payment, which could potentially have a material adverse effect on the Group’s financial position and
the value of the shares and the Group’s operations and results. Please see note 18 for more information.
(E) Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concern while maximizing the return
to shareholders through the optimization of the debt and equity balance. The Group’s overall strategy remains unchanged from prior
year. The capital structure of the Group consists of net debt (borrowings disclosed in note 18 after deducting cash and bank balances)
and equity of the Group (comprising issued capital, reserves and retained earnings). The Group is subject to capital requirements, see
note 18 were the loan covenants are described.
3.2 Other risk factors
SeaBird is subject to various other risk factors. The risks described below are not exhaustive as additional risks not presently known to SeaBird
or which SeaBird currently deems immaterial may also impair the Group’s business operations. If any of the following risks actually
materialize, SeaBird’s business, financial position and operating results could be materially and adversely affected.
SeaBird is exposed to the economic cycle, as changes in the general economic situation could affect demand for SeaBird’s services.
Demand for offshore geophysical services depends on the level of capital spending by oil and gas companies. Capital expenditures, and
in particular exploration and development expenditures, by oil and gas companies can be negatively affected by a number of factors
including, but not limited to, decreases in oil and gas prices, fluctuations in production levels and disappointing exploration results.
Low oil prices typically lead to a reduction in capital expenditures as these companies scale down their investment budgets. Sustained
periods of substantially reduced capital expenditures by these companies may reduce the demand for the SeaBird’s products and
services. Furthermore, recoveries in oil and gas prices do not immediately increase exploration, development and production spending,
so improving demand for SeaBird’s services will generally lag oil and gas price increases. SeaBird’s operating income/loss and operating
results can vary from month to month. Its operating income is difficult to forecast due to changes in oil companies’ exploration and
production (E&P) budgets and expenditures, the competitive environment, efficiency in operations, adverse weather conditions and
other general economic, changes in input costs and changes market conditions.
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Annual Report 2022
Notes to the consolidated financial statements
SeaBird is also exposed to commodity (bunker fuel) price risk. As SeaBird in general has a fairly short order backlog for contracts where
SeaBird is carrying the risk of bunker fuel prices, this risk has not historically been mitigated by forward commodity contracts. Changes in
oil prices and exploration and production budgets could materially affect the business and operating results. Unanticipated difficulties in
pursuing SeaBird’s business strategy could have a material adverse effect on the Group’s business, operating results, or financial condition.
The market for SeaBird’s products and services is competitive. SeaBird faces competition from other companies within the seismic industry.
Generally, overcapacity in the seismic market would have a negative effect on the operating results of the Group, and the possible failure
of SeaBird to maintain competitive offering of equipment and services could have a material adverse effect on its business, operating
results or financial condition.
SeaBird has a strategy of contracting its vessels both towards the long-term market as well as the more volatile spot market. There can be
no guarantee that SeaBird will be able to secure contracts at such rates and utilization rates that are needed. In addition, SeaBird may
experience significant off-hires between charters. Furthermore, disputes under the charter parties may occur, which can result in
responsibility and losses for the Group. Operations in international markets are subject to risks inherent in international business activities,
including, in particular, general economic conditions in each such country, overlapping differing tax structures, managing an organization
spread over various jurisdictions, unexpected changes in regulatory requirements, complying with a variety of foreign laws and
regulations. SeaBird’s business depends on contracts with customers regarding collection and sale/licensing of geophysical data.
Each contract normally involves a substantial value or consideration to the Group. Furthermore, some of the contracts are governed by
the laws of the operations’ areas, which may create both legal and practical difficulties in case of a dispute or conflict. SeaBird also
operates in regions where the ability to protect contractual and other legal rights may be limited compared to regions with more well
established markets.
There will always be operational risks involved in performing offshore seismic surveys. This includes among others unexpected failure or
damage to vessels and technical equipment, work accidents or adverse weather conditions. These risks can cause personal injury,
prevent surveys to be performed as scheduled, other business interruptions, property and equipment damage, pollution and
environmental damage. SeaBird may be subject to claims as a result of these hazards. SeaBird seeks to prevent loss or damages from
such incidents by insurance, contractual regulations and emergency routines. However, there will always be some exposure to technical
and operational risks, with unforeseen problems leading to unexpectedly high operating costs, substantial losses, additional investments,
etc., which may have a material negative effect on the Group’s operating results and financial position. If for example a vessel is rendered
a total loss, the contract with the customer will be void and SeaBird will under such circumstances lose income that would otherwise come
from operating this vessel. Additionally, the occurrence of any of these risks could damage SeaBird’s reputation.
The parent company is subject to taxation in Norway while several of its subsidiaries are subject to taxation in Cyprus. The Group is also
subject to taxation in various other jurisdictions because of its global operations. SeaBird faces the risk that its tax filings are challenged
and may be subject to unexpected claims for unpaid taxes or sanctions as a consequence of breach of applicable tax legislation.
3.3 Fair value estimation
The fair value of financial instruments traded in active markets (such as listed debt and equity investments) is based on quoted market
prices at the balance sheet date. The quoted market price used for financial assets held by SeaBird is the current bid price.
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. SeaBird uses a
variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date including quoted
market prices or dealer quotes for similar instruments and discounted cash flows.
The carrying value of financial assets and financial liabilities approximate their fair values.
Details with regards to fair value estimation relevant to other financial instruments are set out in note 30.
4 Critical accounting estimates and judgments
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may
differ from these estimates.
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognized in the period
in which the estimates are revised and in any future periods affected.
Judgments made by management in the application of IFRSs that have significant effect on the consolidated financial statements and
estimates with a significant risk of material adjustment in the next year are discussed below.
(A) Estimating useful lives, residual value of vessels and equipment
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Annual Report 2022
Notes to the consolidated financial statements
The Group’s estimates of useful lives and plans for depreciation are based on investment considerations and on experience of technical
and economic life of similar assets. Expected useful life and residual values of the vessels can change according to environmental
requirements, wear and tear, corporate strategy, actual usage of the asset, as well as other operational reasons. If the economic life
assigned to the assets proves to be too long, impairment losses or higher depreciation expense could result in future periods, while longer
actual useful life will decrease the depreciation expense in future years. The assets’ residual values and useful lives are reviewed, and
adjusted if appropriate, at least at each year-end.
(B) Estimated impairment of vessels and equipment
The carrying amount of a vessel is reviewed for potential impairment whenever events or changes in circumstances indicate that the
carrying amount may not be fully recoverable. In such instances, an impairment charge would be recognized if the recoverable amount
(higher of value-in-use and fair value) and its eventual disposition is less than the vessel's carrying amount.
When examining internal indicators of impairment, management assesses a number of factors, such as the vessels’ backlog, operating
cash flows, financial plans, and the Group’s business strategy. Management also considers the physical condition when assessing the
earning capacity of an asset. In examining external indicators for impairment, management considers factors such as the economic
cycle and macro-economic fluctuations, global oil price movement, factors affecting governmental exploration plans, as well as other
factors impacting the customers’ capex plans and demand for seismic services.
The recoverable amounts of the vessels are ordinarily determined using value in use calculations. Each vessel, along with the seismic
equipment attached or allocated to the vessel, is considered to be a cash generating unit being tested for impairment. In developing
estimates of future cash flows, the Group must make assumptions about future day-rates, utilization, operating expenses, capital
investments, residual values and remaining useful life of the vessels. These assumptions are based on historical trends as well as future
expectations. Although management believes that the assumptions used to evaluate potential impairment are reasonable and
appropriate, such assumptions may be highly subjective. Significant and unanticipated changes in these assumptions could result in
impairments in the future periods. Currently, there is elevated uncertainty with regards to the future outlook in terms of utilization and day-
rates. To the extent that the future actual revenues achieved prove to be less than forecasted, impairment losses on vessels and
equipment may result.
Note 7 sets out information about the impairment testing performed in the current year.
(C) Going concern assumption
The assessment of the Company for the appropriateness of the use of the going concern basis is disclosed in note 2.1.
5 Segment information
All our seismic services and operations are conducted and monitored within the Group as one business segment.
Primary reporting format – types of revenues
All figures in USD 000's
2022
2021
REVENUE
Contract
20,164
20,705
Total
20,164
20,705
Revenues from the Group’s largest customer in 2022 amounted to 26% of the Group’s total annual revenues. In 2021 the largest customer
contributed to 51 % of total revenues.
Secondary reporting format – geographical segments
All figures in USD 000's
2022
2021
REVENUE
Europe, Middle East & Africa (EMEA)
5,126
5,162
North & South America (NSA)
5,150
4,991
Asia Pacific (APAC)
9,888
10,552
Total
20,164
20,705
SEGMENT ASSETS
48
Annual Report 2022
Notes to the consolidated financial statements
Europe, Middle East & Africa (EMEA)
22,368
46,018
North & South America (NSA)
25,481
-
Asia Pacific (APAC)
18,017
23,860
Total
65,866
69,878
CAPITAL EXPENDITURE
Europe, Middle East & Africa (EMEA)
3,895
20,961
North & South America (NSA)
-
-
Asia Pacific (APAC)
-
-
Total
3,895
20,961
A substantial portion of the property and equipment is mobile due to SeaBird’s world-wide operation. Asset locations at the end of a
period are not necessarily indicative of the geographic distribution of the revenues generated by such assets during the period.
Geographic distribution of assets is based upon location of physical ownership. The geographic distribution of revenues is based upon
location of performance. Capital expenditures are based on the location of the company that is making the investment.
6 Revenue
Revenue split on type of contract
All figures in USD 000's
2022
2021
Contract revenue
4,917
13,392
Time-charter revenue
15,211
7,313
Bareboat revenue
-
-
Multi-client late sales
-
-
Other revenues
36
-
Total revenues
20,164
20,705
Time of revenue recognition
All figures in USD 000's
2022
2021
At a point in time
-
-
Over time
20,164
20,705
Total revenues
20,164
20,705
Set out below is the amount of revenue recognized from
All figures in USD 000's
2022
2021
Amounts included in contract liabilities at the beginning of the year
368
606
Amounts included in contract liabilities at the end of the year
1,467
368
7 Property, plant and equipment
The “Fulmar Explorer” was reactivated during 2021and upgraded to a high-end source vessel was finalized during 2022. Total investments
during 2022 of USD 3.9 million was related to the vessel, while USD 12.2 million was related to the vessel in 2021. In addition, the seismic
equipment pool was strengthened with a total of USD 8.8 million in 2021 allowing the Group to extend the operation beyond the
company’s own fleet.
The Petrel Explorer was recognized as asset held for sale in 2021, and consequently sold in August 2022 (Note 12).
49
Annual Report 2022
Notes to the consolidated financial statements
All figures in USD 000's
Vessels and
equipment
Dry-dock
costs and
equipment
Office
equipment
Total
Opening net book amount as of 1 January, 2021
40,415
766
159
41,341
Additions
18,073
2,888
-
20,961
Sale of assets
-
-
-
-
Depreciation
-4,885
-706
-53
-5,644
Assets reclassified (to)/from held for sale
-10,814
-
-
-10,814
Other
-1,016
1,222
-
206
Net book amount as of 31 December 2021
41,773
4,170
106
46,050
Cost
109,540
4,544
198
114,282
Accumulated depreciation and impairment
-67,767
-374
-92
-68,232
Net book amount as of 31 December 2021
41,773
4,170
106
46,050
Opening net book amount as of 1 January, 2022
41,773
4,170
106
46,050
Additions
522
3,373
-
3,895
Sale of assets
-254
-34
-
-288
Depreciation
-5,458
-1,449
-53
-6,960
Impairments
-
-
-
-
Assets reclassified (to)/from held for sale
285
-
-
285
Other
-
-
-
-
Net book amount as of 31 December 2022
36,868
6,060
53
42,982
Cost
49,858
9,009
159
59,026
Accumulated depreciation
-12,990
-2,948
-106
-16,044
Net book amount as of 31 December 2022
36,868
6,060
53
42,982
Impairment assessment
The Group performed impairment reviews and determined the value in use of its fleet based on discounted estimated future cash flows
carried out in accordance with the Group's policy described in note 2.9. The assessment has not resulted in any impairment loss.
The Group’s value in use model includes estimates of the expected future cash flows for each vessel along with the immovable and
allocated movable seismic equipment. Cash flows are based on day-rates, utilization, operating costs and required capital investments
over the remaining life of the vessel. These cash flows are discounted at the Group’s weighted average cost of capital (WACC) which
approximates 13.0% to estimate the present value, which is compared to book value at the date of the assessment. The impairment
review is performed on the following vessels:
Asset
Valuation approach
Eagle Explorer
Value in use
Fulmar Explorer
Value in use
The main assumptions used in the calculation of the value in use of the Group’s vessels are:
- Day-rates in 2023 are based on awarded and probable projects expected to materialize. The rates from 2023 and onwards
increase by 2% per year.
50
Annual Report 2022
Notes to the consolidated financial statements
- Utilization in 2022 is also based on awarded and probable projects expected to materialize. Utilization beyond 2022 is based on
the historic average utilization of the industry. Utilization remains constant until the end of the vessel’s useful life.
- Operating and capital expenditure is based on historic averages and the Group’s operating budget and business plan for 2023.
Expenses increase by 2% per year.
WACC is calculated using a standard WACC model in which cost of equity, cost of debt and capital structure are the key parameters.
WACC has been set at 13.0% (2021: 13.5%). The WACC is estimated on a post-tax basis to be in line with the post-tax cash flows used in
the model.
The calculation of value in use is sensitive to changes in the key assumptions, which are considered to be the day-rates, utilization rates,
daily OPEX and the discount rate. Management has performed a sensitivity analysis on these assumptions in order to assess the impact
on the recoverable amounts had the key assumptions been changed in the negative direction, all other things being equal. The following
apply to Fulmar Explorer:
- A decrease in day-rates by 10% over the remaining useful life of the vessels would result in an impairment loss of USD 1.3 million.
- A decrease in utilization rates by 10% over the remaining useful life of the vessels would result in an impairment loss of USD 4.7
million.
- An increase in operating expenses by 10% over the remaining useful life of the vessels would not result in an impairment loss.
- An increase in the WACC by 5% (38% increase) would result in an impairment loss of USD 0.01 million.
The recoverable amount of Eagle Explorer would be equal to its carrying value if the following change in key assumptions occurred:
- A decrease in day-rates by 18% over the remaining useful life of the vessel.
- A decrease in utilization rates by 11% over the remaining useful life of the vessel.
- An increase in operating expenses by 36% over the remaining useful life of the vessel.
Given the inherent imprecision and corresponding importance of the key assumptions used in the impairment tests, it is possible that
changes in the future conditions may lead management to use different key assumptions, which could require a material change in the
carrying amount of the vessels. The risks associated with the judgments, estimates and assumptions used in this exercise are discussed in
note 4 (B).
The impairment assessment on the Group’s fleet is carried out in accordance with the Group's policy described in note 2.9 to the financial
statements.
Mortgages and assets
The Group has a credit facility with Sparebank 1 SMN with a total frame of USD 21.3 million (see note 18 for further details). This facility is
secured with mortgages on the vessels, assignment of the vessel’s earnings, insurances, trade receivables, bank accounts and inventories.
Other payables amounted to USD 1.1 million as at 31 December 2022 are secured by 2nd priority mortgages on the vessels.
8 Income tax expense
SeaBird Exploration Plc is subject to taxation in Norway and the majority of its subsidiaries in Cyprus. The Group is also subject to taxation
in various other jurisdictions because of its global operations. The Group continues to evaluate its historical tax exposures which might
change the reported tax expense.
All figures in USD 000's
2022
2021
Current period
33
99
Adjustment for prior periods
-140
-389
Total current tax
-107
-290
All figures in USD 000's
2022
2021
Continuing operations profit/(loss) before income tax
-11,712
-11,715
Tax arising at the rate of 22%
-2,577
-2,577
Effect of tax adjustments in arriving at taxable profit and tax losses
2,577
2,577
Foreign operations taxed at different rates
-
99
Withholding tax effect current year
33
77
Reassessment of prior year tax provisions
-140
-466
51
Annual Report 2022
Notes to the consolidated financial statements
Total tax expense/(reversal) attributable to continuing operations
-107
-290
All figures in USD 000's
2022
2021
Attributable to continued operations
-107
-290
Attributable to discontinued operations
-
-
All figures in USD 000's
2022
2021
Long term tax payables
-
-
Current portion of tax liabilities
1,000
890
Total tax liabilities
1,000
890
Income taxes, penalties, and interest
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in
the countries where SeaBird operates and generates taxable income. SeaBird establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
In deciding whether deferred tax assets are to be recognized in connection to unutilized tax losses, management considers the subsidiary’s
history of taxable losses and the probability of generating taxable profits before the unused tax losses expire. Management’s assessment
has concluded that no deferred tax assets should be recognized as at year-end.
9 Multi-client library
The components of the multi-client library are summarized as follows:
All figures in USD 000's
2022
2021
Opening net book amount as of 1 January
179
308
Amortization
-139
-129
Other
14
Net book amount as of 31 December
54
179
Costs directly incurred in acquiring, processing and otherwise completing multi-client seismic surveys, including vessel's depreciation, are
capitalized to the multi-client library. Please see note 2.9 for the capitalization and amortization policies related to the multi-client library.
The net carrying value of the multi-client library, by the year in which the marine acquisition surveys were completed, is summarized as
follows:
All figures in USD 000's
2022
2021
Completed during prior years
54
179
Completed during current year
-
-
Completed surveys
54
179
The company invested in and carried out two multi-client surveys in 2018 in the North Sea. Both projects were joint control arrangements
accounted for as joint operations in accordance with the policies described in note 2.6.
10 Trade receivables and contract assets
Trade receivables
All figures in USD 000's
2022
2021
Trade receivables gross
16,093
8,539
Less allowance for expected credit losses
-3,665
-3,665
Trade receivables – net
12,428
4,873
52
Annual Report 2022
Notes to the consolidated financial statements
Of the USD 16.1 million in gross trade receivables, USD 8.8 million relates to receivables from associated companies (Note 19 and Note 29).
The average credit period on sales of goods is approximately 30 days. None of the trade receivables that have been written off is subject
to enforcement activities.
Allowance for ECL and write offs, net of reversals
The movement in allowance of expected credit losses that has been recognized for trade receivables and contract assets, as well as the
methodology under which the allowance has been estimated, are presented in note 3.1 (B) – “Credit risk”.
All figures in USD 000's
2022
2021
Loss on trade receivables
-
30
Loss on other receivables
-
-
Reversed write offs
-
-
Allowance for ECL and write offs, net of reversals
-
30
11 Other current assets
Other current assets overview
All figures in USD 000's
2022
2021
Prepaid expenses and deposits
1,471
169
Contract costs
2,261
1,437
Other current assets
2,387
2,413
Total other current assets
6,119
4,019
The contract costs relate to preparation and mobilization of the vessel and equipment to the intended contract area, capitalized as
“costs to fulfil a contract” under the Group’s accounting policy described in notes 2.18 and 2.24.
The total amount of contract costs recognized as at 31 December 2021 have been amortized in the profit or loss in the current year. The
contract costs at 31 December 2022 are expected to be fully amortized within Q1 2023. No impairments have been recognized in the
year in respect of contract costs assets.
12 Asset held for sale
All the assets held for sale have been marketed for sale or have been agreed sold but the sales process have not been concluded. The
valuations represent sales price or estimated market values for the equipment partly substantiated by statements from independent
experts. During Q1 2023, USD 175,000 had been disposed of in line with book values of 31 December 2022. The vessel Petrel Explorer was
sold in August 2022, an impairment of approximately USD 1.5 million of the vessel was recognised in the profit and loss during Q2 2022.
All figures in USD 000's
2022
2021
Vessel (Petrel Explorer)
-
9,052
Equipment
175
2,137
Total assets held for sale
175
11,189
13 Inventories
The company recognized USD 3.4 million in fuel and lube oil consumption as expenses in 2022 (2021: USD 4.2 million).
All figures in USD 000's
2022
2021
Marine gas oil
457
820
Lube oil
186
366
Other inventory
-
-
Total inventories
643
1,186
53
Annual Report 2022
Notes to the consolidated financial statements
14 Cash and bank balances
The restricted cash is held in blocked bank accounts related to payroll tax, employees’ prepaid taxes and rent deposits.
All figures in USD 000's
2022
2021
Restricted cash
57
70
Cash and cash equivalents
851
2,312
Cash and bank balances
908
2,382
15 Share capital and share options
Number of authorized shares
2022
2021
Number of ordinary shares
91,000,000
84,000,000
Nominal value per share
EUR 0.17
EUR 0.17
Share Capital
All figures in USD 000's
2022
2021
Share capital
16,036
6,854
Share premium
20,908
38,637
Paid in capital
36,944
45,491
Number of shares issued
2022
2021
Total number of shares issued at 1 January
34,276,665
26,946,570
New shares issued
46,199,600
7,330,095
Total number of shares as per 31 December
80,476,265
34,276,665
In June 2021 the Company issued 7,000,000 new shares at a premium price of NOK 4.50 and increased its share capital by EUR 1,190,000
to EUR 5,770,917.
In December 2021 the Company issued 330,095 new shares at a premium price of NOK 4.50 and increased its share capital by EUR 56,116
to EUR 5,827,033.
In January 2022 the Company issued 14,000,000 new shares at a premium price of NOK 2.25 and increased its share capital by EUR
2,380,000 to EUR 8,207,033.
In May 2022 the Company issued 3,500,000 new shares at a premium price of NOK 2.25 and increased its share capital by EUR 595,000 to
EUR 8,802,033.
In July 2022 the Company issued 26,699,600 new shares at a premium price of NOK 3.00 and increased its share capital by EUR 4,538,932
to EUR 13,340,965.
In November 2022 the Company issued 2,000,000 new shares at a premium price of NOK 3.00 and increased its share capital by EUR
340,000 to EUR 13,680,965.
In December 2022 the Company reduced its share premium by USD 16,233,336 with the purpose to write off losses of the Company. The
share premium was further reduced by USD 4,965,858 in relation with the distribution of the Company’s shares in Green Minerals AS to its
shareholders. The distribution was completed on 25 January 2023.
There are no share classes and no voting restrictions on the shares.
54
Annual Report 2022
Notes to the consolidated financial statements
Employee Share Option Plans
The employee share option program consists of 0.72 million warrants and 2.42 million options as of 31 December 2022. Both the options
will vest over period of three years from the grant date, while the options will vest over a period of two years. One third of the options
granted will vest one year after grant date, one third of the options granted will vest two years after grant date and one third of the
options granted will vest three years after grant date; similar to the warrants over two period. All options and warrants are exercisable at
any time within one year from the corresponding vested dates. The options and the warrants have an average exercise prices of NOK
6.72.
Estimated value of the share options granted, reduced for services not rendered, as at 31 December 2022, is presented in equity as share
options granted.
Number of options and warrants outstanding
Opening amount as of 1 January, 2022
2,460,000
Granted during the year
1,040,000
Forfeited during the year
-360,000
Exercised in year
-
Expired in year
-
Closing amount at 31 December 2022
3,140,000
of which is vested
820,000
of which is non-vested
2,320,000
Total options
3,140,000
Share based payments effect on the group’s profit or loss amounts to negative USD 0.2 million for 2022 and positive USD 0.3 million for
2021. The total value of share options granted is calculated using the Black-Scholes model, assuming that all the options will be exercised.
The fair value determined at the grant date is expensed over the vesting period of the options for the options granted less expected
number of forfeited options. The calculation is based on:
- Trailing 252 days logarithmic return volatility of 75%
- Given exercise price for the given option trance the given year, averaging to NOK 6.72
- Time to maturity for the given option tranches
- Assume no dividends
- A risk-free interest rate of 3.9 % per annum, based on 3 months LIBOR
16 Trade and other payables
Contract liability is income earned before contract start-up and accrued over the contract period. The accrued amount at 31 December
2022 was related to two contract starting up in late 2022 and is expected to continue to summer 2023.
The Company has a credit line with Glander, this vendor credit is secured with second priority mortgages over the vessels.
All figures in USD 000's
2022
2021
Trade payables
9,051
14,569
Contract liability
1,467
368
Accrued interest on taxes
48
181
Accrued interest on loans
172
87
Vendor credit
2,341
5,890
Accrued vessel and office costs
3,124
2,292
Payroll related liabilities
1,286
1,526
VAT and other payables
802
73
Total trade and other payables
18,291
24,986
55
Annual Report 2022
Notes to the consolidated financial statements
17 Provisions
Provisions
All figures in USD 000's
2022
2021
Operational provision
331
331
Other provisions
-
-
Total Provisions
331
331
Channge in provisions
All figures in USD 000's
2022
2021
Opening book amount as of 1 January
331
395
Additional provision in the year
-
-
Reversal provision
-
-
Charged/utilized in the year
-
-64
Closing book amount as of 31 December
331
331
18 Interest bearing loans and borrowings
Sparebank 1 SMN term loan and guarantee facility
Seabird has a USD 21.3 million bank facility of which USD 15.7 million has been drawn at year end 2022. The loan is recognized in the books
at par value. The effective loan interest was 8,81 % in 2022 (2021: 5.48%). The loan is further secured with 1
st
priority mortgages over the
vessels, and assignment of vessels earnings and insurances.
Sparebank 1 SMN loan financial covenants:
- Minimum free cash: USD 1 million
- Positive working capital excluding current portion of interest bearing debt
- Equity ratio 45 % (waived until maturity)
The Group is in compliance with all bank covenants as of 31 December 2022.
All figures in USD 000's
2022
2021
Sparebank 1 SMN
Non-current
-
7,559
Current
15,687
7,767
Other loans
Non-current
-
-
Current
600
-
Total
16,287
15,326
All figures in USD 000's
2022
2021
Opening book amount as of 1 January
15,327
8,362
Reciepts from borrowings
11,501
6,964
Interest charged
1,616
619
Repayment of borrowings
-10,606
-
Interest paid
-1,551
-619
Closing book amount as of 31 December
16,287
15,327
56
Annual Report 2022
Notes to the consolidated financial statements
19 Subsidiaries within the Group
Company
Owner
Country of
incorporation
Shareholding
and voting
rights 2022
Shareholding
and voting
rights 2021
Aquila Explorer Inc.
Seabird Exploration PLC
Panama
100%
100%
Biliria Marine Company Limited
Seabird Exploration PLC
Cyprus
100%
100%
GeoBird Management AS
Seabird Exploration PLC
Norway
100%
100%
Green Energy Group AS
Seabird Exploration PLC
Norway
100%
100%
Green Minerals AS
Seabird Exploration PLC
Norway
51%
55%
Harrier Navigation Company Limited
Seabird Exploration PLC
Cyprus
100%
100%
Hawk Navigation Company Limited
Seabird Exploration PLC
Cyprus
100%
100%
Munin Navigation Company Limited
Seabird Exploration PLC
Cyprus
100%
100%
Oreo Navigation Company Limited
Seabird Exploration PLC
Cyprus
100%
100%
Raven Navigation Company Limited
Seabird Exploration PLC
Cyprus
100%
100%
Sana Navigation Company Limited
Seabird Exploration PLC
Cyprus
100%
100%
Seabed Navigation Company Limited
Seabird Exploration PLC
Cyprus
100%
100%
SeaBird Crewing Mexico S. DE R.L. DE C.V.
Seabird Exploration Shipping AS
Mexico
100%
100%
SeaBird Exploration Americas Inc.
Seabird Exploration PLC
USA
100%
100%
SeaBird Exploration Asia Pacific PTE. Ltd.
Seabird Exploration PLC
Singapore
100%
100%
SeaBird Exploration Crewing Limited
Seabird Exploration PLC
Cyprus
100%
100%
SeaBird Exploration Cyprus Limited
Seabird Exploration PLC
Cyprus
100%
100%
SeaBird Exploration Finance Limited
Seabird Exploration PLC
Cyprus
100%
100%
SeaBird Exploration FZ-LLC
Seabird Exploration PLC
UAE
100%
100%
SeaBird Exploration Multi-Client Limited
Seabird Exploration PLC
Cyprus
100%
100%
SeaBird Exploration Nigeria Ltd.
Seabird Exploration Norway AS
Nigeria
100%
100%
SeaBird Exploration Norway AS
Seabird Exploration PLC
Norway
100%
100%
SeaBird Exploration Private Limited
Seabird Exploration PLC
India
26%
-
SeaBird Exploration Shipping AS
Seabird Exploration PLC
Norway
100%
100%
SeaBird Exploration Vessels Limited
Seabird Exploration PLC
Cyprus
100%
100%
SeaBird Seismic Mexico S. DE R.L. DE C.V.
Seabird Exploration Shipping AS
Mexico
100%
100%
Susco AS
Seabird Exploration PLC
Norway
100%
-
Non-controlling interest relates to Green Minerals AS (non-controlling interests hold 49% in the subsidiary), which has been classified as held
for distribution and discontinued operation in the financial statements. For further information, please refer to note 2.3 “non-controlling
interests” for information on transactions with non-controlling interests.
Seabird Exploration Private Limited is recognised using the equity accounting principle. For further information, please refer to note 2.6
“non-controlling interests” for information on transactions with non-controlling interests.
The company has recognized the following balances for its investment in other companies
All figures in USD 000's
2022
2021
Associates
224
-
Other investments
-
-
Total other financial items, net
224
-
57
Annual Report 2022
Notes to the consolidated financial statements
Equity accounted investees:
All figures in USD 000's
2022
2021
Opening book amount as of 1 January
-
47
Sale
-
-47
Share of profits from associates
224
-
Closing book amount as of 31 December
224
-
Asset and liabilities held for distribution:
Year ended 31 December
All figures in USD 000's
2022
2021
Cash and cash equivalents
2,156
-
Trade and other receivables
169
-
Receivables from related parties
8
-
Total Assets
2,333
-
Trade and other payables
142
-
Total Liabilities
142
-
Associated company
Year ended 31 December
All figures in USD 000's
2022
2021
Current assets
11,875
-
Current liabilities
-11,012
-
Net assets
863
-
Revenue
7,511
-
Expenses
-6,650
-
Total comprehensive income
861
-
The Group share of profit
224
-
20 Other financial items, net
All figures in USD 000's
2022
2021
Foreign exchange gain
482
400
Foreign exchange loss
-293
-378
Other financial income
26
964
Other financial expense
-690
-267
Total other financial items, net
-475
719
58
Annual Report 2022
Notes to the consolidated financial statements
21 Other income (expenses), net
All figures in USD 000's
2022
2021
Vessel decommissioning costs
-
-
Client reimbursements
1,304
1,095
Meals and accommodation
171
240
Other income
10
381
Total other income / (expense)
1,485
1,716
22 Expenses by nature
All figures in USD 000's
2022
2021
Charter hire
-
800
Seismic and marine expenses
13,974
14,174
Other operating expenses
90
-6
Cost of sales
14,064
14,968
Crew and crew related costs
4,972
6,045
Total charter hire and operating expenses
19,036
21,013
Staff cost and Directors’ remuneration
2,159
2,410
Legal and professional
1,171
2,008
Travel expenses
21
15
Rent and other office expenses
90
160
Other expenses SG&A
448
970
Selling, general and administrative expenses
3,889
5,563
Charter hire includes charter hire expense for Veritas Viking in 2021 as the Group has opted to apply the 'short-term leases' exemption
permitted by IFRS 16 and to recognize the lease expense on a straight-line basis over the term of the lease period.
Also, included in Rent and office expenses is the rental cost of office premises and small items of office equipment following the 'short-
term leases' and 'low-value assets' exemptions adopted by the Group.
Audit fees:
All figures in USD 000's
2022
2021
Statutory audit
198
187
23 Employee benefit expense
All figures in USD 000's
2022
2021
Crew salaries and benefits
3,433
3,944
Salary costs for staff
1,602
1,658
Social security cost for staff
208
297
59
Annual Report 2022
Notes to the consolidated financial statements
Pension cost for staff
172
256
Directors’ remuneration
142
177
Insurance and other costs
35
21
Total employee benefit expense
5,592
6,354
Including accrued costs relating to the employee stock option plan
595
191
Average number of employees and temporary crew contractors
75
66
24 Finance expense
All figures in USD 000's
2022
2021
Interest on loans and borrowings
1,616
619
Interest on suppliers' balances
237
35
Interest on tax liabilities
1
1
Interest on lease liabilities
-
-
Total finance expense
1,854
655
25 Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to equity holders of the company by the weighted average
number of ordinary shares in issue during the year (note 15).
All figures in USD and/or 000's except earnings per share
2022
2021
Number of shares
Number of ordinary shares in issue at period end
80,476
34,277
Weighted average number of ordinary shares in issue
59,228
30,939
Profit/(Loss) attributable to equity holders of the company
Profit/(Loss) attributable to ordinary shares
-12,244
-10,839
Profit/(Loss) attributable to ordinary shares for continue operation
-11,605
-10,839
Profit/(Loss) attributable to ordinary shares for discontinue operation
-639
-
Basic earnings per share
From continuing operations
-0.20
-0.35
From discontinued operations
-0.01
-
Total basic earnings per share
-0.21
-0.35
The total outstanding amount of shares in the company was 80,476,265 common shares at 31 December 2022 with a nominal value of
EUR 0.17 per share. There are no share classes. The weighted average number of ordinary shares outstanding was 59.2 million in 2022 and
30.9 million in 2021.
26 Dividends
No dividend was distributed for 2021 and no dividend will be distributed for the year ended 31 December 2022.
27 Commitments and contingencies
The Group has a tax refund claim of USD 1.5 million in India, the realization of which is considered probable. In addition, the company has
a tax penalty claim of USD 1.1 million from Indian authorities related to contracts in 2013 and 2014, the outcome of which is not assessed
as probable. It is uncertain when and if the cases will be concluded.
60
Annual Report 2022
Notes to the consolidated financial statements
During 2020 the Group sold it shares in Osprey Navigation Co. Inc (a Panamanian company). Operating activities in this company ceased
in 2020 with the sale of Osprey Explorer for demolition. The sale of the shares generated a non-cash profit of USD 3.0 million as an old
balance sheet item previously recorded as a tax liability in Seabird accounts remained in Osprey Navigation Co. Inc upon the sale and
therefore was de-recognized in the Seabird consolidated financial statements. Although unlikely, it cannot be ruled out that the creditor
may seek to recover the remaining balance from other Group companies, including the parent company SeaBird Exploration Plc.
However, to date there is no indication that this will be the case. In this respect it should also be considered that additional tax exposure
may incur related to VAT, currency risk and delayed interest charges, which may increase a future potential liability.
28 Leases
The Group as a lessee
The has been no lease activity in 2022. The lease activity in 2021 relates to below two vessels
- Voyager Explorer was redelivered to owners in March 2021 after a long-term lease
- Veritas Viking was chartered on a short term lease; from June to November 2021, in connection with a specific contract
The Group has adopted IFRS 16 "Leases from 1 January 2019. IFRS 16 sets out a model for identification of lease arrangements and their
treatment in financial statements. Long-term lease contracts usually need to be brought on to the balance sheet.
At 31 December 2022 there are no lease agreements for vessels. In 2021 the Group has made use of the exemption of not to recognize
assets and liabilities for leases with a lease term of 12 months or less. The Veritas Viking bareboat charter is recognized as short term. The
lease payments are included in the P&L statement on a straight-line basis over the lease term.
The Group as a lessor
During 2022 the company did the following short-term leases:
- Eagle Explorer – approximately 5 months
- Fulmar Explorer - approximately 7 months
During 2021 the company did the following short-term leases:
- Petrel Explorer - 6 months
- Eagle Explorer - 3.5 months
- Veritas Viking - 3.5 months
29 Related-party transactions
Key management and board compensation
Key management is defined as Finn Atle Hamre (CEO), Erik von Krogh (CFO-former) and Sveinung Alvestad (CFO-interim)
Board include Ståle Rodahl (Chairman), Nicholas Knag Nunn, Øivind Dahl-Stamnes, Hans Christian Andersson and Odd Sondre Svalastog
Helsing.
All figures in USD 000's
2022
2021
Management salaries and other short-term employee benefits
406
646
Post-employment benefits
38
34
Board remuneration
142
202
Consulting agreements (board members)
61
244
Total key management and board compensation
647
1,126
Loans from related parties
During the year 2022, short term loans were granted to a subsidiary of the Group amounting to a total of NOK2.660.000 from related
parties. The loans bore interest of 5% resulting to NOK133.000 interest charge. No amount remains outstanding at the year end.
Loans to related parties
SeaBird has no loans to related parties.
61
Annual Report 2022
Notes to the consolidated financial statements
Balances and transactions with related parties
As of 31 December 2022, the Group has recorded USD 8.8 million in trade receivables from associated company. The total revenue
recognised by the Group of the associated company for the Period 2022 was USD 5.0 million.
Commitments and contingencies to related parties
SeaBird has neither commitments nor contingencies to related parties.
Shareholding
Management and the board of directors, as of 31 December 2022 held the following shares on own account:
Name
Title
Ordinary
shares
%
ownership
Outstanding
options*
Outstanding
warrants*
Ståle Rodahl
Chairman
3,255,775
4.0%
360,000
720,000
Nicholas Knag Nunn
Board Member
28,714
0.0%
-
-
Øivind Dahl-Stamnes
Board Member
63,200
0.1%
-
-
Hans Christian Anderson
Board Member
-
-
-
-
Odd Sondre Svalastog Helsing
Board Member
1,208,333
1.5%
-
-
Finn Atle Hamre
CEO
15,125
0.0%
860,000
-
Sveinung Alvestad
CFO
44,843
0.1%
700,000
-
*Please see note 15 for further information of the company's share option program.
Purchase of services from board members
Storfjell AS has invoiced Seabird Exploration PLC USD 0.06 million related to various consultancy work in 2022. Furthermore, Green Minerals
has entered into an advisory agreement with Storfjell AS, a company controlled by Ståle Rodahl (Chairman of the Board of both the
Green Minerals and SeaBird), where Storfjell AS is to assist Green Minerals on business development and financial matters. USD 0.2 million
was booked under the agreement in 2022.
30 Financial instruments
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has the following types of financial assets that are subject to the expected credit loss model:
- trade receivables
- contract assets
- cash and cash equivalents and restricted bank balances
In general, vessels on time charter are prepaid, while vessels contracted to oil companies usually have payment terms on an average of
approximately 30 days. Interest is charged on outstanding overdue trade receivables.
The Group always measures the loss allowance for trade receivables (including lease receivables) and contract assets at an amount
equal to lifetime expected credit loss (ECL). The expected credit losses on trade receivables are estimated by carrying out an individual
assessment on each outstanding balance. Management takes into account the counterparty's financial position, past default
experience, industry knowledge and market reputation. Management also considers macroeconomic factors, such as general economic
conditions, factors specific to the oil and seismic industry and an assessment of both the current and the forecast direction of conditions
at the reporting date.
There has been no change in the estimation techniques or significant assumptions made during the current reporting period.
The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no
realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings.
The collection of receivables is closely monitored by management.
62
Annual Report 2022
Notes to the consolidated financial statements
With regards to cash and cash equivalents, the Group measures its expected credit loss by reference to the banks’ external credit ratings
and relevant published default and loss rates, taking into consideration the EUR 100,000 per bank deposit protection guaranteed under
the EU Deposit Guarantee Scheme. The Norwegian Bank’s Guarantee Fund covers deposits up to NOK 2 million per depositor per bank.
The Group monitors changes in external credit ratings and default rates and compares these to credit risk at initial recognition. Cash held
at banks with investment grade are assessed as low credit risk and belong to Stage 1. As the Group’s deposits are held in banks with high
credit quality ratings with investment grade, the probability of default is low, and the expected credit loss is minimal. Thus, no loss has been
recognized in the consolidated financial statements.
Group’s maximum exposure to credit risk:
All figures in USD 000's
Note
2022
2021
Trade receivables
10
16,093
8,539
Restricted cash
14
57
70
Cash and cash equivalents
14
851
2,312
Total
17,001
10,920
The ageing of trade receivables at the reporting date was:
All figures in USD 000’s
Gross
Impairment
Total
Not past due
2,297
-
2,297
Past due 0-30 days
1,674
-
1,674
Past due 31-120 days
222
-
222
More than 120 days
4,346
-3,665
681
Total trade receivable as of 31 December 2021
8,539
-3,665
4,874
Not past due
6,118
-
6,118
Past due 0-30 days
4,587
-
4,587
Past due 31-120 days
-
-
-
More than 120 days
5,388
-3,665
1,723
Total trade receivable as of 31 December 2022
16,093
-3,665
12,428
The following table details the movement in the allowance for expected credit losses of trade receivables and contract assets:
All figures in USD 000's
Note
2022
2021
Opening amount as of 1 January
3,665
3,707
Provision for expected credit losses
-
30
Derecognized expected credit losses
-
Write-off
-
-72
Net carrying amount as of 31 December
3,665
3,665
The Group has recognized a loss allowance of 100% against all receivables over 120 days past due because historical experience has
indicated that the receivables are generally not recoverable. Please note that the USD 1.7 million included on the balance sheet with
duration above 120 days have been either agreed to be settled in 2023 or settled in full during first half of 2023.
As described in note 3.1 (B), the company’s concertation of credit risk is due to the narrow customer base within the oil & gas industry and
the fact that the market participants face common risks connected to the industry’s general economic conditions.
Liquidity Risk
Ultimate responsibility for risk management rests with the board of directors, which has established an appropriate liquidity risk
management framework for the management of the group’s short-, medium- and long-term funding and liquidity requirements. The
group manages liquidity risk by maintaining sufficient cash and cash equivalents, seeking the availability of equity funding and debt
funding, and by continuously monitoring forecast and actual cash flows.
63
Annual Report 2022
Notes to the consolidated financial statements
The tables below summarize the maturity profile of the group’s financial liabilities at year end on contractual undiscounted payments. The
tables have been drawn based on the earliest date on which the Group can be required to pay. The tables include both interest and
principal cash flows. Floating interest rates are applied on the interest-bearing borrowings (refer to note 18) and tax liabilities.
All figures in USD 000's
On
Demand
Less Than
12 Months
1 to 5 Years
Total
Interest-bearing borrowings
-
12,167
3,949
16,117
Trade payables
-
14,569
-
14,569
Other payables
-
10,416
-
10,416
Provisions
-
331
-
331
Total financial liabilities as of 31 December 2021
-
37,483
3,949
40,369
Interest-bearing borrowings
-
16,287
-
16,287
Trade payables
-
9,051
-
9,051
Other payables
-
9,240
-
9,240
Provisions
-
331
-
331
Total financial liabilities as of 31 December 2022
-
34,909
-
34,909
Currency risk
As described in note 3.1(A)(I), the Group undertakes transactions denominated in foreign currencies; consequently, exposures to
exchange rate fluctuations arise. The Group is mainly exposed to fluctuations with respect to Norwegian kroner, Euro and Singapore Dollar.
The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date are
presented in the tables below.
All figures in USD 000's
Total
NOK
EUR
AUD
Others
Assets
2,713
2,294
16
403
-
Liabilities
-7,817
-4,546
-3,116
-423
268
Net position as of 31 December 2021
-5,103
-2,252
-3,100
-20
268
Sensitivity 10%
-510
-225
-310
-2
27
All figures in USD 000's
Total
NOK
EUR
SGD
Other
Assets
2,632
2,627
5
-
-
Liabilities
-5,458
-2,379
-2,422
-805
148
Net position as of 31 December 2022
-2,825
248
-2,417
-805
148
Sensitivity 10%
-283
25
-242
-81
15
The table also details the Group's sensitivity to a 10% decrease in US dollar against the relevant foreign currencies. A positive number
below indicates an increase in profit. For a 10% weakening of US dollar against the relevant currency, there would be an opposite negative
impact on the profit.
Exchange rates applied during the year:
Average rate
Year end
USD per :
2022
2021
2022
2021
EUR
1.0536
1.1821
1.0666
1.1326
GBP
1.2309
1.3752
1.2026
1.3479
NOK
0.1039
0.1163
0.1014
0.1134
SGD
0.7246
0.7440
0.7459
0.7413
64
Annual Report 2022
Notes to the consolidated financial statements
Interest rate risk
As described in note 3.1(A)(II), the Group's exposure to the risk of changes in market interest rates relates primarily to the Group's borrowing
from Sparebank 1 SMN which is a floating interest loan. The Group does not hold any fixed-rate debt instruments except for a short-term
vendor credit.
The table below presents the carrying values of its floating-rate financial instrument:
All figures in USD 000's
Note
2022
2021
Sparebank 1 SMN - Libor + margin
18
15,687
15,326
Cash equivalents and restricted cash of USD 0.9 million as at 31 December 2022 (2021: USD 2.4 million) are interest bearing assets with
variable rates.
An increase/decrease of 100 basis points in interest rates at during 2022 would have increased/decreased equity and profit or loss by USD
0.2 million (2021: USD 0.1 million).
Fair value estimation
The Group does not hold any financial assets that will require a fair value calculation.
31 Long-term investments
The group holds one long-term investment which relates to an associated company (Note 19).
32 Subsequent events
On 17 January 2023, the parent Company distributed part of its holding in Green Minerals AS to its shareholders, which represented the
asset held for sale as at the date of the statement of financial position. The shares in Seabird Exploration Plc have been traded ex
distribution of its shares in Green Minerals AS as from today, 17 January 2023.
On 24 January 2023 Seabird Exploration Plc has decided to terminate its market making-agreement with Norne Securities AS. The last
effective day for the agreement will be 31 March 2023.
On 31 January 2023 The Company announced that it has received a letter of award for an extension to the 2D campaign in the Eastern
Hemisphere. The extension adds approximately 20 percent to the original contracted volume while the contribution to expected profit
margins is higher due to the impact on overall project efficiencies from the extension.
On 24 February 2023 there was a mandatory notification of trade - primary insider.
On 10 May 2023 Seabird Exploration Plc (the “Company”) announced that it has signed an OBN source contract for the “Eagle Explorer”
in the Eastern hemisphere. The contract will commence in June 2023 in direct continuation of completion of current 2D project. The
duration of the contract is expected to be around 2 months including mobilization.
On 9 June 2023 Seabird Exploration Plc announced that the Company and its main lender has signed a term sheet for the refinancing of
the Company’s term loan and guarantee facilities. The new facilities expire on 30 June 2026. The full loan amendment agreement is not
executed yet.
33 Performance measurement definitions
Seabird presents the alternative performance measurements (APM) that are regularly reviewed by management and aim to enhance
the understanding of the Company’s performance. APMs are calculated consistently over time and are based on financial data
presented in accordance with IFRS and other operational data as described in below table.
Alternative performance measurements
Measure
Description
Reason
EBITDA -Operating profit before
depreciation and amortization
EBITDA is defined as operating profit before
depreciation and impairment of fixed assets
and represents earnings before interest, tax
and depreciation, and is a key financial
parameter for Seabird.
This is a measure for evaluation of operating profitability on
a more variable cost basis as it excludes depreciation and
impairment. EBITDA shows operating profitability regardless
of capital structure and tax situations.
65
Annual Report 2022
Notes to the consolidated financial statements
Alternative performance measurements
Measure
Description
Reason
EBIT- Operating profit
EBIT represents earnings before interest and
tax.
EBIT shows operating profitability regardless of capital
structure and tax situations.
Equity ratio
Equity divided by assets at the reporting
date.
Measure capital contributed by shareholders to fund the
Company’s assets.
Earnings per share
Earnings divided by average number of
shares outstanding.
Measures the Company’s earnings on a per-share basis.
Net interest bearing debt
Net interest-bearing debt consists of both
current and non-current interest-bearing
liabilities less interest bearing financial
assets, cash and cash equivalents.
Net interest-bearing debt is a measure of the Company’s
net indebtedness that provides an indicator of the overall
statement. It measures the Company’s ability to pay all
interest-bearing liabilities within available interest bearing
financial assets, cash and cash equivalents, if all debt
matured on the day of the calculation. It is therefore a
measurement of the risk related to the Company’s capital
structure.
34 Operating environment
The conflict between Ukraine and Russia may have an impact on global Oil & Gas demand and pricing which again may affect the
global market for Marine Seismic services. The Company also uses some crew members of Ukraine and Russian Nationality, these crew
members have been working for the Company for a number of years and have not so far indicated any mistrust or other concerns by
working together. This situation is monitored by the Company. Secondary the Company may encounter difficulties to pay salaries to
Russian crew members due sanctions. If such situation arises the Company will assess the possibility and ultimately change crew to other
Nationalities. Currently the Company does not have any ongoing projects or contracts with Russian or Ukrainian interests.
Other definitions
Measure
Description
Vessel utilization
Utilization is a measure of the Company`s ability to keep vessels in operation
and on contract with clients, expressed as a percentage and are based on
actual days.
66
Annual Report 2022
SeaBird Exploration PLC
Separate Financial Accounts: Seabird Exploration Plc
Statement of income .............................................................................................................................................................................................. 67
Statement of comprehensive income .................................................................................................................................................................. 67
Statement of financial position .............................................................................................................................................................................. 68
Statement of cash flow ........................................................................................................................................................................................... 70
Statement of changes in equity ............................................................................................................................................................................ 71
Notes to the financial statements .......................................................................................................................................................................... 72
1 General information ...................................................................................................................................................................................... 72
2 Summary of significant accounting policies ............................................................................................................................................... 72
3 Income tax expense...................................................................................................................................................................................... 72
4 Other current assets ...................................................................................................................................................................................... 73
5 Cash and cash equivalents .......................................................................................................................................................................... 73
6 Share capital and share options .................................................................................................................................................................. 73
7 Trade payables and other payables ........................................................................................................................................................... 74
8 Revenues ........................................................................................................................................................................................................ 74
9 Other financial items, net .............................................................................................................................................................................. 75
10 Expenses by nature ....................................................................................................................................................................................... 75
11 Finance expenses .......................................................................................................................................................................................... 75
12 Dividends ........................................................................................................................................................................................................ 75
13 Shares in subsidiaries ...................................................................................................................................................................................... 76
14 Commitments and contingencies ............................................................................................................................................................... 77
15 Related-Party transactions ............................................................................................................................................................................ 77
16 Financial Instruments ..................................................................................................................................................................................... 78
17 Audit fees ....................................................................................................................................................................................................... 80
18 Subsequent events ........................................................................................................................................................................................ 80
67
Annual Report 2022
SeaBird Exploration PLC
Statement of income
Year ended 31 December
All figures in USD 000's
Note
2022
2021
Revenues
8
1,003
351
Cost of sales
-54
-18
Selling, general and administrative expenses
10
-1,397
-928
Impairment on group receivables
15, 16
-6,808
-
Impairment on investments in subsidiaries, net of reversals
13
-4,241
-64
Earnings before interest and taxes (EBIT)
-11,497
-660
Finance expense
11, 15
-631
-531
Other financial items, net
9
791
4,551
Profit/(loss) before income tax
-11,337
3,360
Income tax
3
-
8
Profit/(loss) for the period
-11,337
3,368
Statement of comprehensive income
Year ended 31 December
All figures in USD 000's
Note
2022
2021
Profit/(loss)
-11,337
3,368
Other comprehensive income
-
-
Total other comprehensive income, net of tax
-
-
Total comprehensive income
-11,337
3,368
68
Annual Report 2022
SeaBird Exploration PLC
Statement of financial position
As of 31 December
All figures in USD 000's
Note
2022
2021
ASSETS
Non-current assets
Investments in subsidiaries
13
50,328
54,569
Total non-current assets
50,328
54,569
Current assets
Other current assets
4
5
6
Due from related parties
15
12,760
12,808
Cash and cash equivalents
5
40
-
Total current assets
12,805
12,814
Assets classified as held for distribution
13
2
-
TOTAL ASSETS
63,135
67,383
EQUITY
Shareholders' equity
Paid in capital
6
36,944
45,492
Revaluation reserve
12
12
Share options granted
6
354
110
Retained earnings
-5,475
-15,338
TOTAL EQUITY
31,835
30,276
LIABILITIES
Non-current liabilities
Total non-current liabilities
-
-
Current liabilities
Trade payables and other payables
7
319
327
Due to related parties
15, 16
30,981
36,780
Total current liabilities
31,300
37,107
TOTAL LIABILITIES
31,300
37,107
TOTAL EQUITY AND LIABILITIES
63,135
67,383
69
Annual Report 2022
SeaBird Exploration PLC
On 23 June 2022, the board of directors of SeaBird Exploration Plc authorized these Financial Statements for issue.
Ståle Rodahl
Hans Christian Anderson
Chairman
Director
Øivind Dahl-Stamnes
Nicholas Nunn
Director
Director
Odd Sondre Svalastog Helsing
Director
70
Annual Report 2022
SeaBird Exploration PLC
Statement of cash flow
Year ended 31 December
All figures in USD 000's
2022
2021
Cash flows from operating activities
Profit/(loss) before income tax
-11,337
3,360
Adjustments for
Impairment on investments in subsidiaries
13
4,241
Impairment on group receivables
15
6,808
64
Share option plan
6
-244
-334
Loss /(gain) from sale in subsidiaries
-
-4,157
Dividend income
-
-246
Unrealized exchange (gain)/loss
84
4
Interest income
15
-927
-206
Interest expense
11
631
531
Other items
697
-
(Increase)/decrease in trade and other receivables and restricted cash
1
2
Increase/(decrease) in trade and other payables
-7
50
Net movement of related parties balances
15
-12,558
-3,076
Net cash used in operating activities
-12,611
-4,008
Cash flows from investing activities
Payment for investment in subsidiaries
-
6
Proceeds from disposal of subsidiary
-
4,157
Net cash used in investing activities
-
4,163
Cash flows from financing activities
Net proceeds from issuance of ordinary shares
6
12,651
3,616
Other financing
-
-3,800
Net cash from financing activities
12,651
-184
Net decrease in cash and cash equivalents
40
-29
Cash and cash equivalents at beginning of the period, unrestricted
5
0
29
Cash and cash equivalents at end of the period, unrestricted
5
40
0
71
Annual Report 2022
SeaBird Exploration PLC
Statement of changes in equity
All figures in USD 000’s
Paid in
capital
Revaluation
reserve
Share
options
granted
Retained
earnings
Total
equity
Equity as of 1 January, 2021
322,876
12
444
-295,919
27,413
Profit/(Loss)
3,368
3,368
Other comprehensive income
-
Total comprehensive income
-
-
-
3,368
3,368
Share issue
3,617
3,617
Share premium reduction
-277,201
277,201
-
Share premium reduction – Green Minerals shares
-3,800
-3,800
Share options granted/cancelled
-334
-334
Other equity transactions
12
12
Total contributions by and distributions to owners
-277,384
-
-334
277,213
-505
Equity as of 31 December 2021
45,492
12
110
-15,338
30,276
Profit/(Loss) for the year
-11,337
-11,337
Other comprehensive income for the year
-
Total comprehensive income for the year
-
-
-
-11,337
-11,337
Share issue
12,651
12,651
Share premium reduction
-16,233
16,233
-
Share premium reduction – Green Minerals shares
-4,966
4,966
-
Share options granted/cancelled
244
244
Other equity transactions
-
-
0
0
Total contributions by and distributions to owners
-8,548
-
244
21,199
12,895
Equity as of 31 December 2022
36,944
12
354
-5,475
31,835
72
Annual Report 2022
Notes to the financial statements
Notes to the financial statements
All figures in USD 1.000, if not stated otherwise.
The separate financial statements are an integral part of the annual financial statements and should be read in conjunction with the
consolidated financial statements.
1 General information
The accompanying consolidated financial statements represent the activities of SeaBird Exploration PLC for the year ended 31
December 2022 (the “period”). The financial statements were authorized for issue by the board of directors on 23 June 2023.
Country of incorporation
The company was incorporated in British Virgin Islands as a limited liability company. The company redomiciled to Cyprus on 18
December 2009. The primary business address of the company is Panteli Katelari 16, Diagoras House floor 7, 1097 Nicosia, Cyprus.
Principal activities
The principal activity of the company, which is unchanged from last year, is ownership of companies operating within the seismic
industry, including providing financing to subsidiaries.
2 Summary of significant accounting policies
SeaBird Exploration Plc has prepared its financial statements in accordance with International Financial Reporting Standards as
adopted by the European Union. The accounting policies are consistent with those applied in the consolidated financial statements.
Dividend income is recognized when the shareholders' rights to receive payment have been established.
Going concern
As at 31 December 2022 the Company is in a net current liability position of US$18.495, and incurred losses for the year of US$11.337. As at
31 December 2022 the Company is in a net assets position of US$31.835. The assessment of going concern of the Company relies heavily
on the ability of the Company and its subsidiaries, the Group, to secure future cash inflows over the going concern assessment period
which extends through to a period of at least one year from the date of approval of the financial statements to meet their liabilities as
they become due. Refer also to note 2.1 of the Consolidated Financial Statements.
For the discussion of risk factors, financial risk management, and critical accounting estimates and judgments; refer to note 3 and 4 of
the consolidated financial statements.
Shares in subsidiaries (see note 13) are stated at cost less any provision for impairment. The Company periodically evaluates the
recoverability of investments in subsidiaries whenever indicators of impairment are present. Indicators of impairment include such items
as declines in profitability, negative balance between the subsidiary's equity position and the carrying value of the investment, or external
macro-economic factors that may indicate that the carrying amount of an asset is not recoverable. If facts and circumstances indicate
that investment in subsidiaries may be impaired, the estimated future cash flows associated with these subsidiaries are compared to their
carrying amounts to determine if a write-down to fair value is necessary.
The remaining accounting policies applied by the Company are those described in note 2 to the Consolidated Financial Statement.
3 Income tax expense
All figures in USD 000's
2022
2021
Current period
-
-
Adjustment for prior periods
-
-8
Total current tax
-
-8
All figures in USD 000's
2022
2021
Continuing operations profit/(loss) before income tax
-11,337
3,360
Tax arising at the rate of 22%
-2,494
739
73
Annual Report 2022
Notes to the financial statements
Effect of tax adjustments in arriving at taxable profit and tax losses
2,494
-739
Reversal of tax provisions in other jurisdictions
-
-8
Total tax expense/(reversal) attributable to continuing operations
-
-8
The company performed a detailed review of its tax provisions as a part of its annual closing procedures.
4 Other current assets
All figures in USD 000's
2022
2021
Prepaid expenses and deposits
5
6
Other current assets
-
-
Total other current assets
5
6
5 Cash and cash equivalents
All figures in USD 000's
2022
2021
Cash and cash equivalents
40
-
Cash and bank balances
40
-
6 Share capital and share options
Number of authorized shares:
2022
2021
Number of ordinary shares
91,000,000
84,000,000
Nominal value per share
EUR 0.17
EUR 0.17
Share capital:
All figures in USD 000's
2022
2021
Share capital
16,036
6,854
Share premium
20,908
38,637
Paid in capital
36,944
45,491
Number of shares issued:
2022
2021
Total number of shares issued at 1 January
34,276,665
26,946,570
New shares issued
46,199,600
7,330,095
Total number of shares as per 31 December
80,476,265
34,276,665
In January 2022 the Company issued 14,000,000 new shares at a premium price of NOK 2.25 and increased its share capital by EUR
2,380,000 to EUR 8,207,033.
In May 2022 the Company issued 3,500,000 new shares at a premium price of NOK 2.25 and increased its share capital by EUR 595,000 to
EUR 8,802,033.
74
Annual Report 2022
Notes to the financial statements
In July 2022 the Company issued 26,699,600 new shares at a premium price of NOK 3.00 and increased its share capital by EUR 4,538,932
to EUR 13,340,965.
In November 2022 the Company issued 2,000,000 at a premium price of NOK 3.00 new shares and increased its share capital by EUR
340,000 to EUR 13,680,965.
In December 2022 the Company reduced its share premium by USD 16,233,336 with the purpose of write off losses of the Company. The
share premium was further reduced by USD 4,965,858 in relation with the distribution of the Company's shares in Green Minerals AS to its
shareholders. The distribution was completed 25 January 2023.
Employee Share Option Plans
The employee share option program consists of 0.72 million warrants and 2.42 million options as of 31 December 2022. Both the options
will vest over period of three years from the grant date, while the options will vest over a period of two years. One third of the options
granted will vest one year after grant date, one third of the options granted will vest two years after grant date and one third of the
options granted will vest three years after grant date; similar to the warrants over two period. All options and warrants are exercisable at
any time within one year from the corresponding vested dates. The options and the warrants have an average exercise price of NOK
6.72.
Estimated value of the share options granted, reduced for services not rendered, as per 31 December 2022, is presented in equity as share
options granted.
Number of options and warrants outstanding
Opening amount as of 1 January, 2022
2,460,000
Granted during the year
1,040,000
Forfeited during the year
-360,000
Exercised in year
-
Expired in year
-
Closing amount at 31 December 2022
3,140,000
of which is vested
820,000
of which is non-vested
2,320,000
Total options
3,140,000
Share based payments effect on the group’s profit or loss amounts to negative USD 0.2 million for 2022 and positive USD 0.3 million for
2021. The total value of share options granted is calculated using the Black-Scholes model, assuming that all the options will be exercised.
The fair value determined at the grant date is expensed over the vesting period of the options for the options granted less expected
number of forfeited options. The calculation is based on:
- Trailing 252 days logarithmic return volatility of 75%
- Given exercise price for the given option trance the given year, averaging to NOK 6.72
- Time to maturity for the given option tranches
- Assume no dividends
- A risk-free interest rate of 3.9 % per annum, based on 3 months LIBOR
7 Trade payables and other payables
All figures in USD 000's
2022
2021
Trade payables
312
258
Accrued expenses and other payables
7
69
Total trade and other payables
319
327
8 Revenues
75
Annual Report 2022
Notes to the financial statements
All figures in USD 000's
2022
2021
Costs recharged to group companies
958
334
Mark-up to group companies
45
17
Total revenues
1,003
351
The group has a transfer pricing policy in place, which implies that certain sales, general and administrative costs are rechargeable to
SeaBird Exploration Norway.
9 Other financial items, net
All figures in USD 000's
2022
2021
Interest income on intercompany borrowings
927
206
Net foreign exchange gain/(loss)
-92
-40
Dividends received
-
246
Other financial income/(expense)
-44
4,139
Total other financial items, net
791
4,551
Other financial income in 2021 include profit of $ 3.8 million on sale of shares in subsidiary Green Minerals AS that was distributed to the
company's shareholders in January 2021 in connection with the IPO of Green Minerals AS. .
10 Expenses by nature
All figures in USD 000's
2022
2021
Directors’ remuneration
119
133
Share option expense
244
-334
Legal and professional
400
399
Other expenses SG&A*
634
730
Selling, general and administrative expenses
1,397
928
*) Including management fee charge of USD 0.5 million to Seabird Exploration Norway AS (2021: USD 0.5 million).
11 Finance expenses
All figures in USD 000's
2022
2021
Other financial income/(expense)
-
0
Interest expense on intercompany borrowings
631
531
Total finance expense
631
531
Please see note 15 for more information on Interest expense on intercompany borrowings.
12 Dividends
No dividend was distributed for the year 2022 (2021: USD nil).
76
Annual Report 2022
Notes to the financial statements
13 Shares in subsidiaries
Company
Principal activity
Country of
incorporation
Shareholding
and voting
rights 2022
Shareholding
and voting
rights 2021
Investments
in subsidiaries
2022
(USD 000's)
Investments
in subsidiaries
2021 (USD
000's)
Aquila Explorer Inc.
Vessel holding
company
Panama
100%
100%
-
-
Biliria Marine Company
Limited
Inactive
Cyprus
100%
100%
127
127
GeoBird Management AS
Operating company
Norway
100%
100%
-
33
Green Energy Group AS
Management
company
Norway
100%
100%
3
7
Green Minerals AS*
Distributed 25 January
2023
Norway
51%
55%
2
2
Harrier Navigation
Company Limited
Vessel holding
company
Cyprus
100%
100%
13,635
13,635
Hawk Navigation
Company Limited
Inactive
Cyprus
100%
100%
-
-
Munin Navigation
Company Limited
Inactive
Cyprus
100%
100%
33
33
Oreo Navigation
Company Limited
Inactive
Cyprus
100%
100%
-
2
Raven Navigation
Company Limited
Inactive
Cyprus
100%
100%
1,025
1,025
Sana Navigation
Company Limited
Inactive
Cyprus
100%
100%
2
2
Seabed Navigation
Company Limited
Inactive
Cyprus
100%
100%
3,865
3,865
SeaBird Crewing Mexico
S. DE R.L. DE C.V.
Crewing company
Mexico
100%
100%
-
-
SeaBird Exploration
Americas Inc.
Management
company
USA
100%
100%
-
-
SeaBird Exploration Asia
Pacific PTE. Ltd.
Management/operating
company
Singapore
100%
100%
-
-
SeaBird Exploration
Crewing Limited
Crewing company
Cyprus
100%
100%
2,061
2,061
SeaBird Exploration Cyprus
Limited
Management/operating
company
Cyprus
100%
100%
2,657
2,657
SeaBird Exploration
Finance Limited
Finance company
Cyprus
100%
100%
1,049
1,074
SeaBird Exploration FZ-LLC
Management
company
UAE
100%
100%
41
41
SeaBird Exploration Multi-
Client Limited
Multi-client company
Cyprus
100%
100%
332
609
SeaBird Exploration
Nigeria Ltd.
Inactive
Nigeria
100%
100%
-
-
SeaBird Exploration
Norway AS
Management
company
Norway
100%
100%
-
-
SeaBird Exploration Private
Limited
Operating company
India
26%
-
-
-
SeaBird Exploration
Shipping AS
Operating company
Norway
100%
100%
40
40
SeaBird Exploration
Vessels Limited
Shipowning company
Cyprus
100%
100%
25,456
29,355
SeaBird Seismic Mexico S.
DE R.L. DE C.V.
Operating company
Mexico
100%
100%
-
-
Susco AS
Inactive
Norway
100%
-
2
-
*Green Minerals AS is recorded under “Assets classified as held for distribution” in 2022
77
Annual Report 2022
Notes to the financial statements
Movements in investments in subsidiaries:
All figures in USD 000's
2022
2021
Opening book amount as of 1 January
54,569
54,563
Acquisition
2
6
Reclassified to Assets classified as held
for distribution
-2
-
Impairments
-4,241
-
Closing book amount as of 31 December
50,328
54,569
14 Commitments and contingencies
The company's commitments and contingencies as per 31 December 2022 related to financial guarantees are described in note 15 (v).
15 Related-Party transactions
i) Purchases of services and expenses recharged to group companies
Expenses amounting to USD 1.0 million were recharged to group companies with 5% mark-up during 2022 (2021: USD 0.3 million recharged
from group companies).
ii) Key management personnel compensation
The compensation of the key management personnel employed by the company's subsidiaries, as well as the remuneration of the
company's directors, are presented in group Consolidated Financial Statement note 29.
iii) Due from related parties
Loans to companies within SeaBird group:
All figures in USD 000's
2022
2021
Opening net book amount as of 1 January
12,808
2,428
Additional loans, net of repayments
5,833
10,238
Interest charged
927
206
Impairment
-6,808
-64
Net book amount as of 31 December
12,760
12,808
The above loans were provided at 5.8 % weighted average interest rate (1.55% in 2021) and have been repayable on demand. The loans
are unsecured.
Impairment losses are included in statement of income, "Impairment on group receivables".
iv) Due to related parties
Loans from companies within SeaBird group:
All figures in USD 000's
2022
2021
Opening net book amount as of 1 January
36,780
29,476
Additional loans, net of repayments
-6,430
6,773
Interest charged
631
531
Net book amount as of 31 December
30,981
36,780
The above loans were provided at 5.8 % weighted average interest rate (1.55% in 2021) and are repayable on demand.
78
Annual Report 2022
Notes to the financial statements
v) Financial guarantees
The company is exposed to credit risk in relation to financial guarantees given to Sparebank 1 SMN related to a credit facility provided to
SeaBird Exploration Norway AS. The company is equally liable for the repayment of the facility. However, the management has considered
the substance of the agreement and concluded that the obligation is in substance a financial guarantee. The Company's maximum
exposure in respect of these guarantees is the maximum amount the company could have to pay if the guarantee is called on,
irrespective of the likelihood of being exercised, as shown below:
All figures in USD 000's
2022
2021
Sparebank 1 SMN credit facility
15,687
15,326
The related expected credit loss assessment and loss allowance are disclosed in note 16.
The Sparebank 1 SMN credit facility which have been guaranteed by the Company has a maximum limit of USD 21.3 million. The
drawdown at 31.12.2022 was USD 15.7 million.
vi) Dividends
The company received dividends from subsidiaries of USD nil in 2022 (USD 0.2 in 2021).
vii) Shareholding
Management and the board of directors, as of 31 December 2022 held the following shares on own account:
Name
Title
Ordinary
shares
Percentage
holding
Outstanding
options*
Outstanding
warrants*
Ståle Rodahl
Chairman
3,255,775
4.0%
360,000
720,000
Nicholas Knag Nunn
Board
Member
28,714
0.0%
-
-
Øivind Dahl-Stamnes
Board
Member
63,200
0.1%
-
-
Hans Christian Anderson
Board
Member
-
-
-
-
Odd Sondre Svalastog Helsing
Board
Member
1,208,333
1.5%
-
-
Finn Atle Hamre
CEO
15,125
0.0%
860,000
-
Sveinung Alvestad
CFO
44,843
0.1%
700,000
-
*) Please see note 6 for further information of the company's share option program. As per 31 December 2022, 820,000 options is vested
in the company's share option program.
16 Financial Instruments
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the company.
The company has the following types of financial assets that are subject to the expected credit loss model:
- Amounts due from related
- Cash and bank balances (including restricted cash)
- Financial guarantees
The table below details the company's maximum exposure to credit risk as at year end:
All figures in USD 000's
Note
2022
2021
Amounts due from related parties
15
12,760
12,808
Financial guarantees
15
15,687
15,326
79
Annual Report 2022
Notes to the financial statements
Cash and cash equivalents
5
40
-
Total
28,487
28,134
The amount of financial guarantee contracts presented in the table above reflects the company’s maximum exposure with regards to
the guarantees described in note 15 (v) and is not an amount recognized on the statement of financial position.
The receivables from subsidiaries are assessed for lifetime expected credit losses, determining whether credit risk has increased significantly
since initial recognition. At year-end 2022 the receivable balance is USD 12.8 million. When the Company has receivables from subsidiaries,
the loss allowance is estimated based on individual assessment per receivable, taking into consideration the subsidiary's equity position,
financial performance, liquidity position and ability to pay. The company writes off an amount due from related companies when there
is information indicating that the counterparty is unable to pay and/or when there is a management decision to settle intra-group
balances through write-offs. For the year 2022, the Company impaired USD 6.8 million of its receivables from subsidiaries (2021: USD 0.06
million).
With regards to cash and cash equivalents, the company measures its expected credit loss by reference to the banks’ external credit
ratings and relevant published default and loss rates, taking into consideration the €100.000 per bank deposit protection guaranteed
under the EU Deposit Guarantee Scheme and the NOK 2 million guarantee provided by the Norwegian Bank’s Guarantee Fund. As the
company's balances at year end were minimal, no loss has been recognized in the financial statements.
Liquidity Risk
Ultimate responsibility for risk management rests with the board of directors, which has established an appropriate liquidity risk
management framework for the management of the company’s short-, medium- and long-term funding and liquidity requirements. The
company manages liquidity risk by continuously monitoring forecast and actual cash flows on a group level and ensuring the availability
of funding through an adequate amount of available debt or equity.
The table below summarizes the maturity profile of the company’s financial liabilities at 31 December 2022 on contractual undiscounted
payments.
The amounts included for financial guarantee contracts are the maximum amount the company could be forced to settle under the
arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee (see note 15) and is not an
amount recognized on the statement of financial position.
All figures in USD 000's
On
Demand
Less Than
12 Months
1 to 5 Years
Total
Due to related parties
36,780
-
-
36,780
Financial guarantee contracts
-
7,767
7,559
15,326
Total financial liabilities as of 31 December 2021
36,780
7,767
7,559
52,106
Due to related parties
30,981
-
-
30,981
Financial guarantee contracts
-
15,687
-
15,687
Total financial liabilities as of 31 December 2022
30,981
15,687
-
46,668
Currency risk
The company’s exposure to foreign currency risk was as follows based on notional amounts per 31 December 2022.
All figures in USD 000's
Total
NOK
EUR
GBP
Others
Assets
-
-
Liabilities
-256
-212
-44
-
-
Net position as of 31 December 2021
-256
-212
-44
-
-
Sensitivity 10%
-26
-21
-4
-
-
All figures in USD 000's
Total
NOK
EUR
GBP
Others
80
Annual Report 2022
Notes to the financial statements
Assets
-
-
-
-
-
Liabilities
-523
-296
-268
41
-
Net position as of 31 December 2022
-523
-296
-268
41
-
Sensitivity 10%
-52
-30
-27
4
-
The following significant exchange rates applied during the year:
Average rate
Year end
USD per :
2022
2021
2022
2021
EUR
1.0536
1.1821
1.0666
1.1326
NOK
0.1039
0.1163
0.1014
0.1134
GBP
1.2309
1.3752
1.2026
1.3479
17 Audit fees
All figures in USD 000's
2022
2021
Statutory audit
198
187
18 Subsequent events
Note 32 to the consolidated financial statements describes the significant events that occurred subsequent to the end of the reporting
period that impact the company and its subsidiaries. There were no other significant events concerning the parent company alone.
89
Annual Report 2022
DECLARATION OF THE MEMBERS OF THE BOARD OF DIRECTORS AND
THE OFFICIALS RESPONSIBLE FOR THE PREPARATION OF THE FINANCIAL
STATEMENTS
SeaBird Exploration Plc – 23 June 2023
In accordance with Article 9 sections (3c) and (7) of the Transparency Requirements (Traded Securities in Regulated Markets) Law 2007
(''the Law'') we, the members of the Board of Directors and the Company official responsible for the financial statements of Seabird
Exploration Plc for the year ended 31 December 2022, on the basis of our knowledge, declare that:
(a) The annual consolidated and separate financial statements which are presented on pages 21 to 65:
(i) have been prepared in accordance with the applicable International Financial Reporting Standards as adopted
by the European Union and the provisions of Article 9, section (4) of the law
(ii) provide a true and fair view of the particulars of assets and liabilities, the financial position and profit or loss of the
Seabird Exploration Plc and the entities included in the consolidated financial statements as a whole
(b) The management report provides a fair view of the developments and the performance as well as the financial position of
the Seabird Exploration Plc as a whole, together with a description of the main risks and uncertainties which they face.
Members of the Board of Directors:
Ståle Rodahl – Executive Chairman
Hans Christian Anderson – Director
Øivind Dahl-Stamnes, Director
Nicholas Nunn, Director
Odd Sondre Svalastog Helsing, Director
Responsible for drafting the financial statements:
Sveinung Alvestad, Interim Chief Financial Officer
Seabird Exploration Plc
Cyprus
Andrea Tselepou No. 14
8201 Yeroskipou
Pafos
Cyprus
Norway
Sandviksbodene 68
5035 Bergen
Norway
https://www.sbexp.com/
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