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August 16th 2013
2nd Quarter 2013 Results (Unaudited)
CAUTIONARY STATEMENT
This presentation contains both statements of historical fact and
forward looking information. Any forward looking information is based
on management assumptions and analysis and are subject to risks and
uncertainties that are difficult to predict as they relate to events and/or
circumstances in the future.
Actual results and events may differ materially from those expected or
projected in the forward looking statements. Spectrum undertakes no
responsibility or obligation to update or alter forward looking
statements.
This presentation should be read in conjunction with the 2nd quarter
2013 Earnings Release issued by Spectrum August 16th 2013.
Q2 2013 Highlights
• Quarterly revenue impacted by delayed license round activity in Lebanon and
Gabon
• Final phase of Lebanon MC3D completes the Spectrum campaign offshore
Lebanon
• South Africa campaign extended with BroadSeis project in Durban basin
• Focused effort on Adriatic Sea resulted in a major project in Croatia
Spectrum provides Multi Client 2D
Seismic Survey Offshore Croatia in
preparation for license round
Q2 2013 Highlights
• Lebanon round update
• Round opened 2nd May 2013, but
delays due to two Petroleum laws
still to be passed:
• Block delineation
• Production Sharing terms
• Sales trigger dependent on Lebanon
caretaker Government to meet and
approve the Petroleum laws
• Q3 and Q4 Revenues from Lebanon
dependent on political progress
Q2 2013 Highlights • North West Europe at a turning point for Spectrum
• Oslo/Stavanger Organization gaining momentum
• Seamless Seismic growing as new datasets are being
released in Norway
• 2 projects launched in Norway and UK
Barents Sea MC2D PH-I
Southern Gas Basin UK
Q2 2013 Highlights
• Brazil remained active with sales related to 11 round
• Reprocessing in French Guiana and subset of new datasets offers a
regional overview of the Northern margin
Zaedyus Basin
Southeast Foz do Amazonas Basin
Ceara/Potiguar
Para-Maranhao Basin
Barreirinhas Basin
0102030405060708090
100110120130140150
2010 2011 2012 2013
Q4
Q3
Q2
Q1
0102030405060708090
100110120130140150
2010 2011 2012 2013
Q4
Q3
Q2
Q1
Q2 and H1 2013 Financial Highlights
• Q2 Net revenues MUSD 29, up 40% from Q2-12
• H1 Net Revenues MUSD 89, up 95% from H1-12
• Q2 MC investment MUSD36
• H1 MC Investments MUSD 56
• Strong operational cash flow
Gross Revenue MUSD Net Revenue MUSD
Financials
Q2 2013 Income Statement
Quarter Quarter 6 months 6 months 12 Months
ended ended ended ended ended
(USD 1000) 30.06.13 30.06.12 30.06.13 30.06.12 31.12.12
Total operating revenue 31,138 24,588 27% 96,453 61,523 57% 141,136
Revenue share (1,784) (3,643) (7,029) (15,801) (24,164)
Net revenue 29,353 20,945 40% 89,424 45,722 96% 116,972
Amortisation of multi-client library (14,190) (7,669) (34,566) (18,632) (45,757)
Operating expenses (8,700) (4,263) 104% (16,007) (9,918) 61% (26,541)
Cost of stock options 258 (286) (3,153) (2,622) (2,789)
Depreciation and amortizations (870) (621) 40% (1,545) (1,211) 28% (2,530)
EBIT 5,852 8,107 34,153 13,340 39,355
Net Financial items 3,498 837 (9,116) (4,452) (8,401)
Profit / (loss) before tax 9,350 8,945 5% 25,038 8,889 182% 30,954
Spectrum Group
Change
in %
Change
in %
(*) Change in market value of the conversion right on the convertible loan, see next slide
(*)
Q2 2013 Income Statement (IFRS)
• Cost of stock options: MUSD 1.3 income, MUSD 0.3 booked & MUSD 1.0 paid in quarter
– Two components:
1. Accruals of the time value of options outstanding: 1,2,3 and 4 years.
NO CASH EFFECT
2. Employers contribution on difference between strike and market price
of underlying share. Payable expense by Spectrum when called.
CASH EFFECT
• Convertible: MUSD 6.6 income NO CASH EFFECT
– Change in market value of the conversion right of Spectrum’s convertible loan
Segment Results
Quarter Quarter 6 months 6 months 12 Months
ended ended ended ended ended
(USD 1000) 30.06.13 30.06.12 30.06.13 30.06.12 31.12.12
Net Multi-Client revenue 28,753 20,204 88,443 43,763 113,607
Seismic Data Processing 601 741 982 1,959 3,365
Revenue 29,353 20,945 89,424 45,722 116,972
Multi-Client 7,055 7,021 35,231 12,640 38,352
Seismic Data Processing (1,203) 1,086 (1,078) 700 1,003
EBIT 5,852 8,107 34,153 13,340 39,355
Spectrum Group
Multi Client – NBV & Investments
• Q2 2013 Multi Client investments added; MUSD 35.9
0
20
40
60
80
100
120
Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13
1.4 5.9
42.5
4.416.9 23.9 23.2
12.1 19.6
35.9
20.5 25.6
60.156.6 62.0
78.692.7
87.1 86.3
108.0
MUSD
Investment Closing Quarterly NBV
Rolling/book value of MC library
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
EBITDA 4 quarter rolling /book value of MC library rolling
EBIT 4 quarter rolling / bookvalue of MC library rolling
Investment per Vintage Net Book Value (NBV) as % of original investment per financial year vs. allowed
Maximum NBV
15.9
1.1
14.7
57.5
51.5
43.245.7
0% 0%
22%
34%
30%
74%
82%
0% 4%
23%
42%
75%94%
100%
-10
0
10
20
30
40
50
60
70
2008 2009 2010 2011 2012 2013 WIP
MUSD
Original Investment and FVA % Actual NBV % Max allowed NBV
Balance Sheet – Key Figures ($000’s)
Assets 30.06.13 31.03.13 31.12.12
(USD 1000) (Unaudited) (Unaudited) (Audited)
MC Library 107,999 86,289 87,087
Other Intangible Assets 18,692 17,994 18,217
Tangible Assets 5,167 4,122 4,222
Receivables and Inventory 36,873 73,184 59,592
Cash and Equivalents 24,138 12,127 16,988
Total Assets 192,869 193,717 186,105
Equity and Liabilities 30.06.13 31.03.13 31.12.11
(USD 1000) (Unaudited) (Unaudited) (Audited)
Total Equity 120,072 115,637 105,391
Total Long Term Liabilities 20,516 27,304 14,587
Total Current Liabilities 52,281 50,777 66,128
Total Equity and Liabilities 192,869 193,717 186,105
Net interest bearing debt nominal value bonds (16,974) (5,118) (9,372)
Net interest bearing debt nominal value bonds and call of outstanding options (27,051) (16,550) (21,330)
SPECTRUM GROUP
Q2 2013 Cash Flow Statement
Quarter Quarter 6 months 6 months 12 Months
Cashflow ended ended ended ended ended
(USD 1000) 30.06.13 30.06.12 30.06.13 30.06.12 31.12.12
Profit / (Loss) before tax 9,350 8,944 25,038 8,889 30,954
Income taxes paid (2,500) (901) (7,872) (1,800) (2,344)
Depreciation and amortisation 15,060 8,290 36,111 19,843 48,287
Other financial items inclusive share options (6,473) (563) 9,741 5,862 7,305
Working capital changes 36,512 6,722 5,203 16,619 8,329
Net cash flow from operating activities 51,949 22,492 68,221 49,413 92,531
Cash flows from investing activities:
Investment in multi-client library (35,900) (23,917) (55,478) (40,860) (76,162)
Investment in other assets (2,555) (1,258) (3,481) (1,258) (2,566)
Net cash flow from investing activities (38,455) (25,175) (58,959) (42,118) (78,728)
Cash flows from financing activities:
Issued share capital 2,074 1,382 2,074 1,382 1,382
Repayment of capital and dividends (4,145) - (4,145) - (3,228)
Net of borrowings 796 277 220 428 (73)
Interest paid (208) (217) (245) (217) (869)
Net cash flow from financing activities (1,483) 1,442 (2,096) 1,593 (2,788)
Net change in cash and cash equivalents, continuing
operations12,011 (1,241) 7,166 8,888 11,015
Net change in cash and cash equivalents, discontinued
operations - (756) (16) (809) 153
Net foreign exchange diff (unrealised) - (1,034) - (378) (132)
Cash & cash equivalents at start of period 12,127 16,686 16,988 5,953 5,953
Cash and cash equivalents at end of period 24,138 13,655 24,138 13,654 16,988
Cash flows from operating activities:
SPECTRUM GROUP
Operations
Operational Summary
• Four new 2D surveys and one 3D survey during Q2
Areas of High Interest
Focus Area – Lebanon
• Lebanon 3D
• Supported by industry
• 3,100 sqkm completed in 2012
• 2,300 sqkm acquired in Q2 2013
• Final products available
Brazil & Uruguay
• Pelotas basin
• Supported by industry
• Expecting Round 12 in 2014
• Phase I of 8,600 km acquired
• PSDM product available Q4 2013
• Uruguay
• Supported by industry
• High exploration activity
• 3,000 km grid & 1,600 km deepwater
• PSDM product available Q4 2013
• South Africa Orange Basin
• Supported by industry
• High exploration activity
• 10,000 km
• Final product available August 2013
Focus Area – SW Africa
• South Africa Durban Basin (9,500 km)
• Supported by industry
• Broadband survey in partnership with
CGG
• Phase I of 4,500 km completed
• Potential analogues to the basins
offshore Mozambique and Tanzania to
the north and the conjugate North and
East Falkland basins
Focus Area – South Africa
Other Rounds
• Brazil Santos Campos Pre-salt round
• Limited to Libra area
• 13,360 km available
• Gabon
• Indications for a license round H2 2013
• 16,856 km available
• French Guiana 2D repro (7,785 km)
• Northern Margin Tie repro (9,663 km)
• West Mediterranean repro (29,700 km)
• Added NW Med – 6,000 km PSTM data
• Added W Med – 4,500 km PSTM data
• Sicily (2,707 km)
• Madagascar (up to 16,000 km)
• Sergipe (8,620 km)
Reprocessing projects
Q3 update - Croatia
• Mobilizing for a 12,000 km MC2D survey
• Contract with Ministry of Economy (MOE) signed
July 2013
• Ties to Spectrum’s neighboring Italian Adriatic grid
• Mainly over open, underexplored acreage covering
~ 57,000 sqkm
• Prospectivity
• Significant gas discoveries in the northern Adriatic
• Proven oil discoveries in the Southern Italian
Adriatic and large scale structures present
• Timing
• MC2D data ahead of 2014 license round
• New hydrocarbon law in effect on 30 July 2013
• Formation of Hydrocarbon Agency in progress to
oversee 2014 bid round
Q3 update new surveys
• Barents sea (8,000 km)
• MC2D in the Hoop area, phase I of 2,200 km
• Alternative to expensive MC3D in area
• Broadband product
• Spectrum’s first survey offshore Norway
• MC2D Southern UK gas basin (3,700 km)
• Survey covering 15+ blocks
• Predominantly acreage available for the 28th License
Round
• Broadband product
• Spectrum’s first project in the UK since 1998
Outlook
Outlook
Robust sales pipeline for H2 2013 with ongoing and upcoming license
rounds in Brazil, West Africa, Lebanon and Croatia
Unchanged expected Multi Client investment of MUSD 100 -120
Organic growth funded by operational cash flow
