2 Feb 2015 07:00
2 February 2015
SeaEnergy PLC
Trading Update
SeaEnergy PLC (AIM: SEA) ("SeaEnergy" or the "Company), the innovation-led offshore energy services business, is pleased to announce a trading update in advance of presenting at the Share Magazine/Cenkos Innovators and Investors Forum, which is taking place at the Business Design Centre in Islington on 3 February 2015.
Highlights
· Full year results set to be in line with expectations
· International growth across the business continues with large contract win for R2S with supermajor in Canada
· Significant turnover increase in 2014 for Marine business
· R2S shortlisted for Innovator Award in the prestigious SPE Offshore Achievement Award
· Strong outlook for the start of 2015
R2S
SeaEnergy's R2S Visual Asset Management software/service continues to be the main engine for growth and achieved record turnover in 2014. There is a strong order book for the first half of 2015, and the newly-expanded business development team continues to drive international growth.
We were delighted to announce a significant contract offshore Canada for a new "supermajor" client last month, and our first capture team has already been deployed to this project. Securing a new international client is a very positive step forwards, and adds another very high quality name to our client list, which now includes four of the five supermajors.
Despite the recent fall in the oil price, demand remains high from operators in the UK North Sea, US and Mexico and we continue to see new enquiries from other international markets including Southeast Asia and the Middle East. We expect to see more international deployments in 2015 and are addressing strategies for local resourcing where appropriate.
As the operational benefits and cost efficiencies of the R2S VAM software/service are becoming widely recognised, we are increasingly seeing clients sharing R2S captures with their partners. These references strongly drive additional business development and help to attract new clients.
During the current period of oil price decline, many oil operators are looking to reduce costs and increase efficiency. Accordingly, we have been continuing to reinforce the very significant cost savings realisable through the use of the R2S VAM software/service and by strengthening the case for R2S VAM as a tool to plan decommissioning projects. Whilst we are alert to potential impacts on our pipeline of business, we have to date not seen any oil price related project cancellations or deferrals and have continued to receive new enquires and firm orders for operators already in cost-cutting mode.
SeaEnergy works closely with its clients to help them make the best use of their R2S imagery. This close working relationship generates the opportunity for identifying additional services that we can offer to clients and represents a development opportunity for SeaEnergy, where additional value can be delivered to clients; we are working hard to develop in these areas.
Consulting
The reorganisation that placed Max & Co (the digital media agency) and R2S Forensic within Consulting is beginning to bear fruit. The combined consulting team offers SeaEnergy's clients enhanced services, with Max's 20 years of expertise and experience in the offshore oil and gas environment adding value to the strategic consulting offering. The team offers additional services to complement the R2S software/service, again helping clients to make the best use of their wealth of complex data.
Turnover was a blend of recurring work from well-established clients across a range of products enhanced by the addition of prestigious and sensitive visual reconstruction/analysis work undertaken for the Hillsborough Inquiry.
As we move into 2015 our expectations are for this trend of recurring business to continue with further development of opportunities across the group.
Marine
SeaEnergy Ship Management (SEASM) continues to manage three vessels for Go Offshore (Asia) Pte Ltd., and is seeking additional vessel management opportunities. Turnover in 2014 has significantly increased over 2013, as it includes the revenue related to the vessels taken under management during 2014. The ship management business is currently profitable with three vessels under management; additional vessels will add to profitability.
SeaEnergy has participated in and reached the very late stages of the tender process with both of the operators to have undertaken tenders for offshore wind farm vessels to date. Although we have yet to secure an order, our vessel designs and concepts for wind farm operations continue to be attractive and competitive.
Legacy assets
We are aware of the continued decline in the market value of our interest in Lansdowne Oil & Gas PLC based on its share price, despite its successful farm-out of the attractive Midleton acreage to Kinsale Energy Limited. We remain confident that Lansdowne will achieve a farm out of its Barryroe discovery, and believe that following this event, its share price should recover and there may be an opportunity to commence our exit from this investment. We note that if the Lansdowne share price remains below our carrying value we will be required to make an impairment provision to the asset value of Lansdowne in our balance sheet, with a negative effect on the reported results for SeaEnergy. Any impairment provision would reverse in the future, as and when the Lansdowne share price recovers and would be treated as a non-recurring item.
Recognition and Engagement
We were very pleased to welcome Nicola Sturgeon to our offices on her first visit to Aberdeen as Scotland's new First Minister. In an extended visit, the First Minister learned about how the R2S VAM software/service supports clients across the oil & gas sector, and how its international growth, supported by Scottish Enterprise and Scottish Development International, is a model for Scottish companies.
We were delighted to announce that Return to Scene, the wholly-owned subsidiary comprising R2S VAM software/service operations, has been shortlisted in the Innovator Award category in the prestigious SPE Offshore Achievement Awards for 2015. This nomination illustrates the impact that R2S VAM has on offshore operations - reducing cost, minimising unproductive bedspace usage and optimising operational planning and safety.
SeaEnergy has signed a joint marketing agreement with Cyberhawk, the leading remote aerial inspection and surveying company, under which we can offer Cyberhawk's aerially-captured images as an enhancement to the standard R2S VAM offering. We have completed our first project with them, and have seen real benefits for clients in incorporating Cyberhawk imagery within the R2S VAM models.
SeaEnergy personnel continue to participate in a number of events and initiatives. In the coming months, these events include:
· Shares Magazine/Cenkos Innovators and Investors Forum, Business Design Centre, Islington, 3 February 2015
· "Lunch & Learn: Visual Asset Management technology for the Oil and Gas Industry: Its application in Insurance" - Lloyds of London, 17 February 2015
· SPE Digital Energy Conference, Houston, 3-5 March 2015
· ITF Technical Showcase, Aberdeen, 4 March 2015
· R2S Forensic V3 and User Group Launch, Glasgow, 26-27 March 2015
The Company expects to release its results for the year ended 31 December 2014 on 16 April 2015.
Outlook
The outlook for SeaEnergy remains very positive: the R2S VAM software/service is set for continuing internationalisation and growth, Consulting is deepening its relationships with clients to offer added value, and Ship Management is managing three vessels and seeking additional opportunities.
Chairman David Sigsworth said "We're very pleased to have achieved our expectations for 2014, and are looking forward confidently to continuing growth towards sustainable profitability this year and dividends in due course."
For further information contact:
SeaEnergy PLC |
+44 1224 748480 |
John Aldersey-Williams, Chief Executive | |
Steven Bertram, Finance and Commercial Director | |
Oriel Securities (NOMAD) | + 44 20 7710 7600 |
James Grace Jessica Kalyanpur | |
Bell Pottinger - Public Relations | +44 20 3772 2500 |
Rollo Crichton-Stuart | |
Lucinda Alderson | |
Information for Editors
1. The five supermajors are BP, Chevron, Exxon, Shell and Total
Notes
About SeaEnergy PLC:
SeaEnergy PLC is an innovation-led offshore energy services business, based in Aberdeen, Scotland and listed on the London Stock Exchange's AIM Market. The Group's three active divisions comprise R2S, Consulting and Marine. R2S provides photographic capture and three dimensional modelling of oil & gas installations, linking these images to asset management databases for major international oil operators, allowing them to improve the performance of their assets whilst providing operational efficiencies. The Consulting division delivers strategic support for companies in offshore energy, helping them to improve asset integrity, reduce costs and improve output. The Marine division offers ship management services for offshore vessels in both oil & gas and offshore wind roles and is actively participating in tenders for the provision of purpose built offshore wind farm support vessels.
www.seaenergy-plc.com
www.r2s.co.uk
www.seasm.com