1 MB - PGS

Petroleum Geo-Services ASA
Petroleum Geo-Services ASA
Carnegie “Top of the Pops” Norwegian Oil Service Seminar
Jon Erik Reinhardsen, President & CEO
London, June 3 2008

Leading Geophysical Company
Marine
Data Processing
and Technology
Onshore
Marine market
leadership
Technology
differentiation
Growing
profitably
• USD 1.27 billion in
revenues in 2007 (~85%
of total revenues)
• 20 Data Processing
centers world wide
• USD 50 million in
technology spending
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• USD 246 million in
revenues in 2007 (~15%
of total revenues)

Financial Summary
Revenues
Adjusted EBITDA
USD million
500
450
400
350
300
250
200
150
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08
USD million
275
255
235
215
195
175
155
135
115
95
75
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08
EBIT
Cash Flow from Operations
250
200
*
250
200
USD million
150
100
USD million
150
100
50
50
0
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08
0
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08
* Gain from sale of Ramform Victory to METI
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Acquisitions in 2007 Supporting Future Growth
• Arrow Seismic provides an
important supplement to the highend
seismic fleet
• Applied Geophysical Services
(AGS) enhancing depth imaging
capabilities
• Roxicon Geogrids expanding
multi-client MegaSurvey product
• MTEM accelerating entry into the
EM market
PGS MegaSurvey
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The World’s Most Advanced Seismic Acquisition Capacity
• Ramform fleet
– Six Ramforms in current operation
– One Ramform on long term agreement with METI
– One Ramform new-build (delivery Q2 2009)
• Five 6-streamer vessels in own operations
• “Arrow” 3D vessels
– Four high end new builds in process
• Two on lease agreement to WesternGeco
• Two to be completed and included in PGS seismic
services (Q2 and Q4 2009)
– Two 3D vessels chartered to seismic companies
• 2D/source vessel capacity
– Four owned source/2D vessels
– Three vessels chartered in on time charters
• 8 – 12 Onshore crews
– Approximately 65,000 channels
– Capabilities in all terrains
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Bringing Marine Productivity to the Next Level
Ramform S-class
• Ramform Sovereign was delivered March
6 on time and budget
• The most productive vessel in the industry
– Transit speed +14%
– Acquisition speed +7%
– Endurance +25%
– Fuel efficiency +6%
• The vessel has commenced in operation
and performs in line with expectations
– Already set new industry towing record with
17 streamers
• Steel work on Ramform Sterling is
currently ahead of original schedule at
Aker Yards hull building facility in
Romania (Aker Tulcea)
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Demand for Energy Will Increase
Oil Consumption per Capita (bbls)
30
25
20
15
10
5
• Per capita consumption of
oil in large emerging
economies is a fraction of
the OECD average
• There are 3 billion people in
fast growing emerging
economies
0
United
States
OECD
Average
Japan Germany China India
• As standard of living
improves demand for energy
will increase
Source: Simmons & Company International
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Falling Reserve Replacement Ratio Triggers Seismic Spending
Global Exploration Spending vs Offshore Discoveries
# discoveries
250
200
150
100
50
# offshore discoveries Exploration spending $bn
50
45
40
35
30
25
20
15
10
Exploration spending, $ bn
• Oil companies need
to make more
discoveries to stop
the falling reserve
replacement ratio
5
0
2001 2002 2003 2004 2005 2006 2007
0
Source: ABG Sundal Collier, Offshore Research, Citigroup
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Continued High Order Backlog for PGS
USD million
1000
900
800
700
600
500
400
300
200
100
Order Backlog
• Backlog for PGS is close to 8
months
– Marine USD 783 million
– Onshore USD 122 million
• Trend towards longer and
multi-season contracts
0
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08
Marine
Onshore
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Continued High Bidding Activity
Marine Seismic Acquisition
2,500
• Tendering activity 1) at very
high levels
USD million
2,000
1,500
1,000
500
-
feb.04
mai.04
aug.04
nov.04
Active Tenders
feb.05
mai.05
aug.05
nov.05
feb.06
mai.06
aug.06
nov.06
feb.07
mai.07
aug.07
nov.07
feb.08
All Sales Leads (Including Active Tenders)
• Larger surveys have
seen strong growth since
2004
1) Source: PGS Internal Estimate as of April 2008, Active Tenders and All Sales Leads 3D Contract Seismic only.
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Largest Ever HD4D Campaign
Ideally suited for Ramform Sovereign
• Confirming unique position in
Brazil
• Proving uniqueness of the most
advanced vessel in the industry
• Contract value USD 180-200 mill
• Covering 4,945 km² + the
Alternative Program of 120 days
• 18 streamers x 6,000m streamer
length x 50m streamer separation
• Or 14 streamers x 8,000m x 50m
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PGS’ Cost Effective Vessel Fleet
Streamer count
1-400
401-500 501-600
Ramform Sovereign
Ramform Sterling
Ramform Valiant
Ramform Viking
Ramform Vanguard
Ramform Challenger
Arrow Newbuild 3
Arrow Newbuild 4
Ramform Explorer
Pacific Explorer
Atlantic Explorer
Nordic Explorer
Ocean Explorer
Orient Explorer
Laurentian
• PGS’ fleet is well positioned to generate high margins in a strong Marine
seismic market
• Adding quality assets and emphasising efficiency
Source: The cash cost curve is based on PGS’ internal estimates and highest number of streamer towed. The graph shows all seismic vessels in
the market, both existing and new-builds.
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Relative cost efficiency per streamer per day

Drivers of Productivity
• Fleet efficiency development
– Delivery of new Ramform S-class – 22 streamers, higher steaming- and acquisition
speed, more fuel efficient and higher endurance than Ramform V-class
– Improved foil fairing technology – reducing drag and increasing reliability
– Front end depth control – improving weather window and handeling safety
– Gun steering system – improving 4D quality and efficiency
– Cable cleaner – reducing downtime in areas with barnacles
– Source monitoring – reducing downtime of source operations
– Deflector steering system – increasing speed in turns
– Unmanned support vehicles – improving efficiency and safty (to be implemented in 2009)
– Multitow – reducing drag and increasing survey speed (to be implemented in 2009)
• Streamer acquisition efficiency
– Solid streamers – very low noise and cost effective
– New front stretch – less noise and less tension
– GeoStreamer® – a quantum leap in quality and efficiency
– Lateral streamer steering
– Integrated acoustic positioning
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Multi- and Wide-Azimuth Achievements
• PGS has shot 21,330 square kilometer
of multi-azimuth since 2002
– A total of 11 jobs
– Most of it is done in the Mediterranean
– Multi-azimuth jobs are in the order
backlog and they are getting larger
– Three multi-azimuth jobs completed in
2008
• Crystal I and II covers 13,296 square
kilometers
– Acquisition part of Crystal II was
completed late April
– Processing of Crystal I data will be
completed June/July
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Technology Challenges- Exploration in Complex Areas
Multi- and Wide-Azimuth Potential
• Potential for multi- and wide-azimuth is significant
• Further industrial optimization will bring down cost and increase volume
• One size does not fit all and the winners are true technology focused
companies
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Marine Seismic Acquisition Capacity is Increasing
Streamers
700
600
500
400
300
200
100
0
58% capacity
increase from 2005
to end 2008
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008E 2009E 2010E
Total Streamers Worldwide (Usual Configuration)
Total Vessels Worldwide
80
70
60
50
40
30
20
10
0
Vessels
• Total streamers used expected
to rise
– ~15% in 2008 over 2007
– ~28% in 2009 over 2008
– ~17% in 2010 over 2009
• PGS streamer count expected
to rise
1)
– ~2% in 2008 over 2007 1)
– ~20% in 2009 over 2008 1)
– ~15% in 2010 over 2009
Higher E&P spending and more complex surveys absorbs capacity increase
1) Excluding Ramform Victory
Source: PGS Internal Estimate May 2008
Total Streamers Worldwide and Total Vessels Worldwide are estimates of 6+ streamers 3D vessels
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Technology Challenges- Exploration in Complex Areas
GeoStreamer: Imaging through complex geology
Conventional
• Implementation on track
GeoStreamer
– Excellent data quality recorded by
Akademik Fersman in Australia
– 2D and 3D spreads on schedule –
first 3D spread Q4, 2008
– MC2D in Mediterranean in August
– Excellent client response to
technology
GeoStreamer combines two different sensors yielding
Enhanced resolution, Better penetration and Improved
efficiency due to deeper tow
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PGS EM Defines Extent of Potential Hydrocarbon Charge
North Sea Viking Graben
PGS EM Data
Water depth 135 m
Target 1435 m
Thickness ~10 – 50 m
Acquisition Parameters
Seismic Data
Acquired October, 2007
700 A source
21.6 km line length
4.7 km / day
4.6 days of acquisition
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Source Vessel

Towed EM: Potential Revolution in Efficiency
• Motivation:
– Increase acquisition efficiency
– Utilize seismic acquisition
platform
– Capitalize on global seismic fleet
distribution
• Main challenges (risk factors):
– Design sufficiently quiet system
– Acceptable handling
Two main concepts considered:
(1) Sensor body solution
• Feasibility demonstrated through
several field trials
• Design and fabrication of large
scale system for field trials Q4,
2008 (2) EM streamer
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OptoSeis: Reservoir Surveillance Yields More Oil
• Permanently installed seismic receivers over a
producing field
• Seismic data on demand
• Detailed image of pressure and saturation
changes over time: Increased Field Recovery
• Fiber Optics is the preferred solution by
most operators: Improved durability – no insea
electronics
• OptoSeis applicable for monitoring C02
sequestration
• Adding EM sensors to more directly map fluid
changes
• Other sensor may significantly further enhance
OptoSeis
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PGS Value Drivers
• Productivity & scale
– Best-in-class vessel portfolio
– Largest 3D MC library
• Technology differentiator
– Rolling out new technologies and
businesses
• Outstanding operational record
– Increasingly rewarded
• Proactive, countercyclical
financial management
– Value creation through the cycle
Strong Underlying Fundamentals – Energy Demand –
Low Reserve Replacement
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Cautionary Statement
• This presentation contains forward looking information
• Forward looking information is based on management
assumptions and analyses
• Actual experience may differ, and those differences may
be material
• Forward looking information is subject to significant
uncertainties and risks as they relate to events and/or
circumstances in the future
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