SEB Nordic Seminar – 8th January 2014, Copenhagen
Dolphin Group Company Presentation
Wednesday, January 8, 2014
By Atle Jacobsen (CEO)
This presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and
uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current
expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that
are major markets for Dolphin Group ASA (“Dolphin Group” or “Dolphin”) and its subsidiaries. These expectations, estimates and
projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar
expressions. Important factors that could cause actual results to differ materially from those expectations include, among others,
economic and market conditions in the geographic areas and industries that are or will be major markets for the Dolphins businesses,
oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in
currency exchange rates and such other factors as may be discussed from time to time. Although Dolphin believes that its
expectations and the information in this Report were based upon reasonable assumptions at the time when they were made, it can
give no assurance that those expectations will be achieved or that the actual results will be as set out in this Report. Dolphin nor any
other company within the Dolphin group is making any representation or warranty, expressed or implied, as to the accuracy, reliability
or completeness of the information in the Report, and neither Dolphin, any other company within the Dolphin Group nor any of their
directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in the
Report. Dolphin undertakes no obligation to publicly update or revise any forward-looking information or statements in the Report.
There may have been changes in matters which affect Dolphin Group subsequent to the date of this presentation. Neither the issue
nor delivery of this presentation shall under any circumstance create any implication that the information contained herein is correct
as of any time subsequent to the date hereof or that the affairs of Dolphin Group has not since changed, and Dolphin Group does not
intend, and does not assume any obligation, to update or correct any information included in this presentation. The contents of this
presentation are not to be construed as legal, business, investment or tax advice. Each recipient should consult with its own legal,
business, investment and tax adviser as to legal, business, investment and tax advice. This presentation is subject to Norwegian law,
and any dispute arising in respect of this presentation is subject to the exclusive jurisdiction of the Norwegian courts.
Disclaimer
2
“Dolphin’s mission in 2014 will be to deliver on our ambitious
business plan and secure strong growth through high-capacity
vessel expansion, focused Multi-Client investments in Norway
and Brazil, and to continue to strengthen our internal G&G
competence within advanced seismic processing and imaging.”
Atle Jacobsen, CEO Dolphin Group ASA
FULL ONSHORE AND OFFSHORE
PROCESSING SERVICE
In house software development
and R&D
Processing centre in UK
On-board processing on all
vessels
Developed – advanced seismic
broadband solution (SHarp)
GROWING MULTI-CLIENT
DATA LIBRARY
Dolphin Group – Business segments
EXPANDING MODERN FLEET
4
MARINE MULTI-CLIENT PROCESSING
In production
• 3x High-End 3D vessels
• 1x Mid size 3D vessel
• 1x Ice-class 2D vessels
Under construction
• 3x High-End 3D vessels
with delivery in , Q1/Q2
2014 and Q1 2015
*PCIe= Peripheral Component Interconnect express
Library of modern 2D and
3D data
Areas of focus:
• North Sea
• West Africa
• Brazil
USD 93 million already
invested.
16,000 km2 of 3D and
49,000 km of 2D
successfully completed
• Position Dolphin as a pure play exposure to the seismic market through
contract seismic, Multi-Client and seismic data processing
• Focus on high-end vessels that meet client expectations
Pure play seismic
market exposure
Low cost and high-
end vessel base
Focus on operational
efficiency and
attractive returns
Strong strategic
position
• Long-term TC agreements with vessel owning companies
• Strong relative cash cost efficiency per streamer per day
• High utilisation and OPEX savings due to proven vessel design
• Capitalise on fleet specifications and operational experience
• Healthy balance between contract seismic and Multi-Client
• Generate strong, stable and healthy cash flow
• Fleet expansion represents an opportunity for profitable growth
• Flexible and attractive structure to reach critical mass based on sound
investment decisions
Business Strategy
5
Market share 2014*
Dolphin
9%
*Source: SEB Enskilda CF, companies
Focus on operational efficiency and shareholder value
Build a strong Multi-
Client database
• Create attractive short and long term returns through building a strong
Multi-Client database with industry support
• Initial focus on the North Sea, West Africa and Brazil
6
«Polar Marquis»
(April 14)
«SuperDuke» (Mar 15)
Sanco Sword (April 14)
Our high-end 3D capacity more than doubles within 15 months
2011 2012 2013 2014 2015
98
221
2014 target
<400
Revenues
USD million Revenues
are growing
with an
expanding
fleet
ILLUSTRATIVE
208
(H1+Q3)
Delivery of current fleet
Q3 ’13
Polar Duke (3D, 12-14 str)
Polar Duchess (3D, 12-14 str) Sanco Swift (3D, 16 str)
� Delivered May 2011 � Delivered April 2012
Artemis Arctic (3D -6/8str)
Artemis Atlantic (2D)
� Delivered May 2011 � Delivered May 2011
Q1 ’12
May ’11Jan ’11
� Delivered July 2013
Sanco Sword (3D, 16 str)
� Delivery April 2014
Vessels to be delivered
7
Four high-end 3D seismic vessels to be delivered in 2013-2015 complementing one of the industry’s most modern fle ets
Polar Marquis (3D , 14 str) Super Duke (3D, 22 str)
� Delivery April 2014 � Delivery Mar 2015
Q1 ’14 Q1 ’15
Geo Atlantic is upgraded to a high-end 3D
vessel and changes name to “Polar
Marquais” at delivery Jan 2014
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
One of the most modern fleets in the seismic industryAge distribution of marine seismic 3D fleet (including newbuild orders)
Median fleet age (including newbuild orders) : 2008
Average fleet age (including newbuild orders) : 2006
Source: SEB Enskilda CF
8
Artemis
Arctic
Polar
Duke
Polar
Duchess
Sanco
Sword
Sanco
Swift
Super
Duke
Geo
Atlantic
201420122011 2013 2015
Decommissioned or downgraded to 2D/source vessel
Pacific
ExplorerWestern
Patriot
Geowave
Commander
Western
PrideGeco
Topaz
Vessels likely to be decommissioned or downgraded 2014E-2015E
Viking II
Atlantic
Explorer
CGG
Symphony
Geo
Barents
Geowave
VoyagerVantage
Geco
Emerald
Marquis delivery
9
Market shares (# of practical streamers – 3D fleet)
Dolphin is one of the fastest growing marine 3D seismic vessel
operators and will be the fourth largest player in 2015
Other
CAGR 13E-15E
0.4%
-4.3%
41.4%
0.0%
7.1%
0.6%
-13.3%
26%24%
26%
24%
16%19%
18%22%
12% 11%12%
11%
11% 10% 10% 9%
710
30%
6%
2012
666
32%
12%
2014E
692
26%
10%
2013E
5%
2015E
716
22%
Adjusted for fleet retirement/down grades described on slide #8
• The difficult Q4-Q1 market environment
has accelerated vessel decommission
and downgrades
• Dolphin positioned to be the fourth
largest player by 2015
• The three largest players will control
close to 70% of the global fleet in 2014
• Very favourable competitive landscape
compared to previous cycles.
Multi-Client Projects - Status & Strategy
• Build on an asset portfolio that over time will enhance
the robustness of our business model
• Areas of focus:
• North Sea
• West Africa
• Brazil
• Joint Venture to diversify the Multi-Client portfolio and
reduce investment risk
• Differentiate Dolphin Multi-Client with Dolphin’s high-
end onboard fast-track SHarp Broadband processing
10
11
36
913
21
37 39 4146
61
0
10
20
30
40
50
60
70
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Library book value
11
48
29
-4
45
20.1
0
5
10
15
20
25
30
35
40
45
50
2010 2011 2012 2013 YTD Sept.
Cash investments vs net Multi-Client sales
Net cash investments Net MC sales
DolphinMulti-Client seismic data assets - BV of USD 61 million
• Attractive Multi-Client library, well
positioned and built on limited cash-
investments
• Healthy balance between historical
total USD 88 million cash invested and
net sales of USD 69 million
• Sales potential of Multi-Client library >
2x
• Dolphin guides 2013 Multi-Client
investments of USD 50-70 million
12
Maud Basin SHarp BroadBand 3D
• Covers about 3,300 km2 of mostly open acreage
potentially in the Norwegian 23rd Licensing
Round
• About 1/3 already acquired and in processing
• This high-resolution SHarp BroadBand 3D
survey is designed to tie the recent Wisting
(shallow Jurassic reservoir) discovery with
“estimated reserves of between 60mbbls to
160mbbls of light oil”
• Pre-funding by industry secured after
commencement
• Similar features would be fast to drill and
potentially quick to develop
Multi-Client in the Barent Sea started in October
12
13
Dolphin started first 3D Multi-Client survey in Brazil in November
• Dolphin in partnership with TGS has
begun acquisition of a 5,000 km2 3D
SHarp Broadband survey utilising the
Sanco Swift. Processing is to be completed
by TGS
• This survey is northeast of the Pão de
Açúcar discovery in an area of similar
structural and stratigraphic characteristics
and will be of high interest to the industry
for future bid rounds
• This exciting initial survey represents the
first step in Dolphin’s planned Multi-Client
Brazil campaign
Data Processing Strategy
• Full service marine seismic company
• Process Multi-Client data to control quality and timing
• Process & re-process proprietary data
• Capture the full value of all surveys
• Build sufficient capacity for growing fleet
• Purchased Open Geophysical Inc
• Control of our own software for speed and direction of development e.g. PSDM, multi-sensor
• Continue software licensing – an additional source of revenue
• Differentiate from competitors via innovation
• SHarp - AVO friendly broadband
• Differentiate by doing as much as possible onboard
• Fast track products have added value to clients
• Available on all our vessels
• Develop a global presence
• UK and Singapore processing centres already established
Sub-salt PSDM
SHarp broadband
14
15
Dolphin broadband technology - SHarp
• Accepted by the industry
• Proven case histories
• Recognition of AVO and processing advantages
over other broadband techniques
• Close to 50% of all Dolphin surveys acquired by
Dolphin are now SHarp
• Proprietary SHarp 4D test completed
• SHarp deep tow combined with powerful vessels
allowed extended weather window as well as
increase in bandwidth
• Development and testing of a new broadband
source
Calm sea
Rough sea
Dolphin going world-wide in 2014
16
Houston
OsloBergen
London
Singapore
Dolphin 3D Multi-ClientOffices Dolphin 2D Multi-Client Vessels
Polar Duke
(Contract)
Polar Duchess
(Contract)
Artemis Atlantic
(Contract)
Artemis Arctic
(Contract)
Sanco Swift
(Multi-Client)
Polar Marquis
(under construction)
Sanco Sword
(under construction)
Dolphin Group ASA
2014 Outlook and Guidance
“Cautiously Optimistic
Seismic market expected to grow strongly…
High oil prices continuing to drive demand for marine seismic
spending
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
95 97 99 01 03 05 07 09 11 13E
E&
P S
pe
nd
ing
(U
SD
m)
Glo
ba
l se
ism
ic s
pe
nd
ing
(US
Dm
)
Marine seismic market Onshore seismic market E&P spending*
0
20
40
60
80
100
120
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
95 97 99 01 03 05 07 09 11 13E 15E
Oil
pri
ce (
US
D/b
bl)
Glo
ba
l se
ism
ic s
pe
nd
ing
(US
Dm
)
Marine seismic market Onshore seismic market Oil price (brent)
� The historically high correlation between seismic spending and E&P
spending is expected to continue going forward
� SEB Equity Research estimates increase in E&P spending of 7% in
2013 and 4% in 2014
– Marine seismic spending estimated to increase by 11% in 2013 and 4% in 2014
� An average price of USD 109/bbl for 2013, USD 105/bbl in 2014,
and USD 100/bbl in 2015 providing a healthy margin over the
estimated budgeting price of USD 90-100/bbl, and supporting the
positive E&P spending growth projections
Source: SEB Equity Research
*Based on a selection of E&P companies interviewed by SEB and does not reflect total global E&P spending (represents ~~66%)
…fuelled by and oil price well above the budgeting price
18
2014 Dolphin vessel schedule (for illustration purposes*)
Schedule comments:
• Total backlog including Multi-Client prefunding of more than USD 200 million as per 1st January
2014; 100% covered in Q1, approximately 90% in Q2 and 40% in Q3 2014
• Very difficult Q4 with late awards and permitting delays, causing low utilisation
• Strong visibility for 2014, expected to improve further due to new and high-capacity vessels in
demand
• Increased global footprint that will reduce seasonal effects
19
*Backlog can be moved between vessels or shifted in time and duration
Vessel
Polar Duke Med India North Sea
Polar Duchess Australia
Artemis Arctic Med India North Sea
Artemis Atlantic West Africa North Sea
Sanco Swift South America
Sanco Sword North Sea
Polar Marquis
Idle Tendering Contract Multi-Client Transit
AUG SEPT OCT NOV DECOCT NOV DEC JAN JUNE JULYFEB MAR APR MAY
20
2014 Global market outlook
• Q4-Q1 slow down in global demand, were causing lower
utilisation and pressure on rates. Also Multi-Client sales and
pre-funding was negatively effected
• The visibility for high-capacity vessels have significantly
improved during the last part of Q4, driven by awards of high
volume contracts
• Average pricing for the 2014 contract work booked so far, is in
the range 5% higher than the average 2013 pricing
• No indication of added supply beyond known capacity
• Barrier of entry continuing to increase, through increased
complexity, technology and CAPEX requirements
• Q4-Q1 slow down creates waves in the industry that will
make the business more robust long term
• 2014-2015 a new wave of seismic exploration demand
building up in frontier deep-water areas. Typical high
demand areas are Brazil, Barents Sea, Russian Arctic, Canada
and Australia
2014 Guidance - summary
“Dolphin’s mission in 2014 will be to deliver on our ambitious business plan and secure
strong growth through high capacity vessel expansion, focused Multi-Client
investments in Norway and Brazil, and to continue to strengthen our internal G&G
competence within advanced seismic processing and imaging.”
• Through the introduction of the new high-capacity vessels, Sanco Sword and Polar Marquis
to the market in April, the Dolphin full year revenue is expected to exceed USD 400 million
for 2014.
• The Dolphin Multi-Client investment will primarily be made in prospective areas offshore
Brazil, Norway and UK. Approximately 15-20% of our fleet capacity is expected to be
allocated on Multi-Client projects, representing an investment in the range of USD 60-80
million for 2014
• Dolphin external Processing services are expected to grow more than 50% in 2014
• During 2014, Dolphin will select and prepare for the next generation of multi-sensor
streamer technology, thus extending the broadband advantages of Dolphin's acquisition and
processing technique SHarp
• New Vessel capacity to be delivered on time and budget
• Sanco Sword (3D, 14-16 str.) expected delivery , early April 2014
• Polar Marquis (3D, 12-14 str.) expected delivery , ultimo April 2014
• Pricing, costs, utilisation
• Expected day-rates of 280-330 USD/day in 2014 for 3D high-end seismic vessels
• Overall revenues expected to exceed USD 400 million for 2014
• Target to improve overall margins in 2014 versus 2013
• Utilisation high-end 3D vessels, 84-90% - no “slow-down” effect assumed for 2014
• Cash Opex high-end 3D vessels of ~120’-135’ USD/day
• All high-end 3D vessels will be permanently accompanied by 1x chase vessel and 1x support/fuel vessel in 2014
• Other external third party costs and revenues, 6-8% of revenues for 3D vessels. In addition individual reimbursable country
specific costs will apply.
• Estimated SG&A costs USD 5.5 – 6.0 million per quarter in 2013
• Multi-Client activities
• MCS 2D, 6-8 vessel months and MCS 3D, 10-12 vessel months
• Total gross MC-investments USD 60-80 million
• Pre-funding targets of 2D > 50% and 3D>70%
• Sales ratio’s 1.8 – 2.4 times MCS investment costs
• Capex
• New seismic equipment investment of total approximately USD 80-85 million for 2014
• Capacity upgrade and maintenance of USD 8-10 million, dependent on clients configuration request
• Processing 2014, USD 3-5 million
22
Dolphin – detailed assumptions and guidance for 2014 as per 8 January
Questions and Answer Session
Question & Answer