Operational delays on two surveys to negatively affect SeaBird earnings

Seismic services player SeaBird Exploration has experienced delays in surveys in West Africa and the Americas, which will result in increased operating expenses and negatively affect earnings. In addition, SeaBird has decided to decommission one of its seismic vessels and use its parts to outfit one of the vessels recently bought from BOA.

SeaBird said on Tuesday that a niche 3D survey in West Africa – announced on April 1 – was initially expected to be completed early in 3Q 2019 utilizing the Nordic Explorer (chartered-in project vessel), but is now estimated to be completed in the latter part of 3Q.

Furthermore, a 2D survey in the Americas – announced on January 7 – was expected to be completed in the first half of 3Q 2019 utilizing the Harrier Explorer, but is now estimated to be completed in the second half of the same quarter.

According to the company, these production delays and survey extensions are due to difficulties with availability and lead-time of select seismic streamer equipment parts and will result in increased operating expenses, which will negatively affect earnings in both 2Q and 3Q 2019.

The Nordic Explorer or the Harrier Explorer will after completion of the current surveys start on the previously announced contract with Wintershall Dea for 2D acquisition in the Norwegian Sea. The survey has an expected duration of approximately two months, including mobilization.

The 2009-built Eagle Explorer recently finished a source contract for CGG in the Gulf of Mexico and has recently started another survey for CGG West of Shetland. This survey is scheduled for completion in September.

The Voyager Explorer is currently warm-stacked in Southeast Asia. SeaBird said that there are several contract leads for the vessel, predominantly for 2D exploration. However, the clients’ decision processes for exploration-related surveys in Asia appear to be generally delayed.

The Osprey Explorer finished in late June a source contract in the U.S. Gulf of Mexico for an OBN project. The vessel is currently transiting to North West Europe for a source contract with expected duration of approximately two months, including mobilization.

The BOA Thalassa was delivered to SeaBird on June 13, 2019. Concurrently with the delivery under the purchase agreement with BOA SBL, SeaBird also stepped into the charter party with EMGS.

The charter party has a remaining firm period of about nine months and EMGS has two further six months extension options. EMGS is currently employing the Thalassa on an EM-project in South East Asia.

Outfitting BOA Galatea with Aquila Explorer parts 

The BOA Galatea, also built in 2009, was delivered to SeaBird on July 25, 2019. Preparations for outfitting/rigging the Galatea as a seismic source vessel are ongoing and the vessel is expected to enter the market in early 2020 as the “Fulmar Explorer”.

In light of the recent fleet renewal related acquisitions and the outfitting/rigging of BOA Galatea, the company has decided to decommission the 1981-built Aquila Explorer.

As a part of this decommissioning, select seismic equipment – including compressors and winches – will be removed from the Aquila Explorer and utilized for the seismic outfitting of the BOA Galatea.

The decommissioning is expected to be concluded in the third quarter of 2019 and write-down of Aquila Explorer of approximately $2.3 million will be taken in the second quarter in anticipation of the sale of the vessel.

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