Good morning and welcome to SeaBird Exploration third quarter presentation. We are today represented by our Chairman, Ståle Rodahl, CFO Sveinung Alvestad, and myself, CEO Finn Atle Hamre. SeaBird Exploration is the only pure-play OBN (Ocean Bottom Node) source company listed on the Oslo Stock Exchange. We currently own and operate two high-end OBN source vessels currently operating in the Gulf of Mexico. Our capacity is sold out until mid-next year, with a total of 20 months of firm backlog, extending to 30 months when including options. In addition to the two vessels, we have a seismic equipment pool, which allows us to outfit a third vessel quickly and at a relatively low cost. During the last two-plus years, we have restructured our balance sheet, significantly repaid our debt, and balanced our working capital position. This has resulted in a very strong capital structure.
With the backlog mentioned, we have a robust cash flow visibility over the next nine months. We have now entered a new phase, starting to distribute cash to owners. We've already paid out two cash distributions this year and announced plans to pay another in next year. Financial performance summary: HSEQ, zero lost-time incidents over the past 12 months. Operational excellence is key to winning and renewing contracts with clients. Operational downtime at a low 2.2% over the last year, which reflects our strong focus on HSEQ. Financials: We generated 4.4 million of EBITDA in the third quarter. Our balance sheet is robust, with a net debt just south of 11 million and a working capital position of about 3 million. Valuation: Based on our current market cap, our enterprise value is just shy of 50 million, implying a conservative vessel value of 25 million per vessel.
Our forward-looking EV/EBITDA multiples are in the range of 2.5-3, which we view as attractive. Distribution: Year to date, we've announced 90 øre per share of cash distribution to shareholders, with 25 øre per share paid out in July, another 25 øre paid out in November, and we expect to pay another 40 øre in the first quarter of next year. This slide you will have seen before, and we will not comment further today, but enclosed for your easy reference. Utilization: From a strong focus on technical and operational performance, we have managed to keep our fleet busy with impressive utilization over the last two years. Now, with both vessels on contract within the OBN space, to mid-next year, we expect utilization to remain in the high 90s. Backlog: 20 months of firm backlog with 12 months options.
We are sold out until mid-next year, giving a total of 20 months of firm backlog. Backlog is shared between our vessels, the Fulmar Explorer until end of August next year and Eagle Explorer until end of June next year. Eagle Explorer includes two six-month options. OBN market trends: We believe the global OBN market will experience structural growth in the coming years, driven by key market attributes. Oil companies are allocating more resources to easily accessible reserves near existing infrastructure, which increases demand for OBN service. The OBN technology provides a better understanding of reservoirs to optimize production in the lifespan of fields. OBN's market share has grown from around 10% in 2014 to nearly 50% of total offshore seismic spending today. We've noted interest in market info from our clients lately. TGS recently announced 95% of OBN revenues from oil companies' operational budgets.
Coupled with the Viridien ex-CGG, we are seeing OBN being used for exploration. This is giving excellent results and is gaining interest from clients, i.e., both ILX budgets, operational budgets, and now also explorational budgets are tapping into the OBN space. Supply side: I contracted 70% over the last 10 years. On the supply side, there are now only about 15 active OBN source vessels in the market, excluding the Russian and Chinese vessels, down from about 50 vessels 10 years ago. All 15 vessels are currently on contract, give and take. In discussions with clients, it is apparent that securing critical resources such as a source vessel is becoming more critical, and we therefore expect next year's contract renewal discussions to be based on longer-term contracts. With that, I'll pass it on to our CFO.
Thank you, Finn Atle. So now turning to the financials: Both vessels were operating with a very strong utilization in the U.S. Gulf of Mexico this quarter, and hence contributed to a solid financial quarter for SeaBird. As said by Finn Atle, SeaBird is now sold out of capacity until July 2025, and as such, we expect both revenue and EBITDA to remain at this level given the continued solid operations the coming quarters. The net profit for the first nine months of the year stands at $4.4 million, which provides a robust foundation for the full year. The balance sheet remains strong with a 57% equity ratio and a net debt of $10.7 million. Hence, today's share price implies a valuation of $25 million per vessel when not attributing any value to our equipment pool. This is a level we believe is conservative.
We just completed the second cash distribution of NOK 25 øre per share to our shareholder on the 8th of November, and today the board of directors proposes a third cash distribution of 40 øre per share. With this, the last 12 months' cash distribution to shareholders amounts to 90 øre per share, or equal to 18% of the current market capitalization. Revenues increased to $10 million in the quarter as both vessels operated throughout the quarter at close to 100% economical utilization. Revenues for the last 12 months remain strong and have increased to $34 million. We continue to see upside to this going forward as both vessels have firm contracts until July and September 2025, respectively. Q3 EBITDA of $4.4 million was in line with the previous guided number. Adjusted EBITDA for the last 12 months increased to $12.3 million.
Based on the firm EBITDA backlog we have secured over the past year, we are confident that we will see a significant increase to this level in the coming quarter. The adjustments to the historical EBITDA can be found in the appendix of this presentation. SG&A for the quarter was $800,000, and we continue to see an annual run rate of around $4 million with quarterly fluctuations. Cash flow: SeaBird ended the first nine months of 2024 with a cash balance of $3.5 million. Net cash flow for the first nine months was $1.3 million, whereas operational cash flow of $8.1 million was negatively impacted by a $2.2 million working capital bill from low levels. The working capital currently stands at $3.3 million, a level which we are comfortable with. CapEx of $1.5 million was mainly related to ordinary and planned maintenance of and on the vessels.
Debt service cost was $3.5 million, whereas $2.1 million is repayment of debt and $1.4 million is interest. Cash distribution to shareholders during the first nine months was $1.9 million, but we have since the quarter ended completed the second distribution of $1.8 million, and the board today proposed a $2.9 million distribution, which is payable in Q1 2025. Net interest-bearing debt at the end of the third quarter was $10.7 million, whereas the gross debt stands at $14 million. The debt comprises of $11 million of bank financing and $3 million in interest-bearing equipment financing. We have, since the start of 2022, reduced our net debt by around 45%, or $13 million. The maturity of the bank facility is in mid-2026, and the loan has a quarterly installment of $700,000. The company is in compliance with all of our bank covenants.
With that, I will leave the word to Ståle.
Thank you, Sveinung, and good morning, everyone. So I'm just going to take you through a couple of slides on how we see the market and our capital allocation strategy. And I mean, to understand the market, essentially the basis for it is what Finn Atle showed you in terms of the supply and demand slides. Demand is growing 20% per year. This has been largely up to now ILX-type spending, while supply has dropped with around 70%. And on that basis, OBN is already sold out. Now, as Finn Atle showed you, the comments from several industry players show that the use of OBN is now being extended also to exploration. This forms a very healthy basis for continued growth in OBN on top of the growth that you're seeing in ILX-type spending at the moment.
We think this is a trend that will continue for several years going forward. It started to have some effect on rates, as you can see. So rates bottoming out in 2020 at around $30,000. Current pricing is between $50,000-$60,000, we believe. With current, we mean the level that we've seen so far in, let's say, over the last 12 months. However, we have, or in the second quarter report, we introduced, we've done this twice. In March 2022, we introduced a level of $50,000-$60,000 at the time where we think contracts would price, and indeed, a few months later, they did. And in the second quarter this year, we introduced a level of $70,000, which we think would be within reach for 2025. And I'm now super happy to be able to say that certainly fixtures are now being done at a level around $70,000.
So there, of course, one needs to look at the particular contract, the region, the duration of the contract, and so on. But in any case, seeing these numbers now is very encouraging for us, indeed. I think on that basis, it's worthwhile for investors to take a note at sensitivity for free cash flow and through that dividend potential for SeaBird. So every $5,000 day rate increase increases the dividend capacity in the company by 0.5 crowns, or around 10% per year. Next, please. When it comes to pricing then in the various offshore markets, we are showing you a slide here that looks at the repricing of the implicit value of SeaBird's vessels compared to what we see in, call it, the real physical markets out there. The OBN market is very small. The transactions are few and far between.
But there are other markets, in particular in PSVs, where there are more transactions and a better basis for looking at pricing. Also, one should note that PSVs have the capability of being rebuilt into OBN vessels if one so wishes. No such reconstructions have been done so far. In any case, the implicit repricing of SeaBird vessels has gone up from $20 million as they were priced in 2022 to around $25 million today. A second-hand platform supply vessel around the same year of built, so modern-ish tonnage, has repriced from $11 million to $30 million, or 170%.
If you were to take such a PSV and a second-hand PSV with around the same year of build and refurbish it into an OBN vessel, the total cost for such an operation would be more than $50 million, which would be up around 90% from similar investment cost back in 2022. By the way, on the OBN replacement cost, this is not new replacement cost in the traditional sense of new buildings. This is replacement in terms of taking a second-hand PSV. So we just take a note of that. This is the repricing that SeaBird has seen. We leave it up to the markets, of course, to price the company.
But if we look at the next slide, we certainly think that the cash being generated in SeaBird and the dividends that we are currently distributing, that there is nothing there, at least, that should be holding pricing back, we hope. The aim of the company, just to repeat that, as we have said now for quite some time, for years actually, is to distribute excess cash to shareholders on a quarterly basis without jeopardizing SeaBird's sound financial position. In the slide to the right, you can see the last 12 months' distributions that have been announced, and we are now at around NOK 0.9 per share. If we go back to when we started the distributions to our shareholders, which is February 2023, you will see that 45% of the market capitalization of SeaBird has been distributed to shareholders.
And just to make that clear, on distributions going forward, we then continue to—we expect to continue on this path, and we have given you the sensitivities. We look forward with excitement to the market that we are seeing ahead of us and the potential to not only continue to distribute healthy dividends, but maybe also over time, as we reprice our contracts, being able to grow that dividend. So in summary, we had some questions on this, the operational performance in SeaBird, because we continue to repeat this. I think it must be eight or nine quarters in a row. I think the first headline you meet is solid operational performance. So what is this solid operational performance that has now emerged in SeaBird? I think the basis for that, without spending time on it, goes back to the restructuring that started in the fourth quarter of 2019.
It was a deep restructuring. We scrapped three vessels, and we cut 70% of our head count, so in essence, the basis for this is, and also we have invested a lot into our vessels to make sure that we have the right capacity for the segment that we are the most bullish on, and that is OBN, so in short, it is a combination of having the right asset correctly configured, optimized, and having the right-sized organization with the right people on board, and here I'd like to also draw our CEO, Finn Atle Hamre, and his team, and the tremendous work that is being done on operations there, so this is shortly the explanation.
We have now seen this solid operational performance over quite a number of quarters, and this is the key behind the attractive contracts that we are indeed getting and our ability to perform on those. On the contracts, we have 20 months of firm backlog in our books, which provides us with good visibility. Finn Atle mentioned there are some options in addition on that. We have a solid capital structure, and again, all excess cash is distributed to shareholders. As you understand from the previous slide, with an implicit price of $25 million on SeaBird's vessels and a replacement cost on second-hand tonnage of twice that, it is simply not an issue for the company to dilute our shareholders through adding more capacity.
If more capacity is to be added, it will have to happen in such a way that we can at least maintain and preferably grow our dividends. And we are adamant that this will form the basis for any capacity increase. So to sum up, SeaBird Exploration gives shareholders strong visibility for growing cash distribution going forward and a low implicit value per vessel. And with that, I hand it back to you, Sveinung, for Q&A.
Thank you, Ståle. So quite a few questions here. And just to remind everyone on the call, you can post your questions in the Q&A tab in your console. So first, I think I will just start with you, Finn Atle. A couple of questions on the future of Eagle, more specifically. Are we going to pursue 2D projects going forward? And how do you see the market for that? And then, of course, if we're going to use Eagle for that kind of operation in the future. Do you have some comments around that?
Yes, of course. We will indeed keep our capability to do so. We've seen a few interesting projects, particularly in Asia, that we've been following closely, and we've even been sort of commercially looking at them. Obviously, without Eagle available, we haven't been able to sort of conclude and do projects. But certainly, to keep equipment and the ability to do so, I think is interesting just to keep that availability there. So yeah, I think we have the equipment, we have the knowledge, and we'll just keep that in-house on the back burner for now while we're still working on the contracts we have.
Thank you. And on that, just to follow up on Eagle, as you said, we have a couple of six-month options on it. When can the market expect to get any news on that? And can we say anything about that?
I think contractually, your client would be obliged to get back to us a few months before the end of the firm period. But I think also they would need to plan their projects, etc. So we expect information to flow in our direction as well before that.
Thank you. And so a couple of questions which I can expand on. Firstly, it was a question about the EGM we are calling in order to distribute capital and how long that will persist. So firstly, I think what you need to see here is the way we are returning cash to our shareholders now is by repaying paid-in capital. And in order to do that, we need to go through EGMs. And at least we foresee that's going to be the way we are going to do it the next couple of times. And looking further out in time, we obviously have the EGM scheduled for mid-next year, and we will have some proposition on how we can do distribution going forward from that time. So yeah. Also, there is a couple of questions on utilization. We talk about economical utilization in the presentation.
There is a question: is there any financial impact for us when we have operational or waiting time in between contracts and in the project? The short answer is that our contribution to the EBITDA is equal in both operational and standby mode. Obviously, if we have downtime due to our capacity to operate the vessel, then of course we will see downtime. But as you saw in our graphs for the third quarter, we have succeeded to have 98% economical utilization for the quarter, which we are very proud of. Then a question for you, Ståle. Each quarter we talk about consolidation. I have a question: is it necessary to consolidate? The follow-up comment is, wouldn't it be better for shareholders to continue as a standalone company with very high dividends? So maybe you can give some flavor around consolidation.
Yeah, certainly it could be. But so just to take a step back, SeaBird is a company run by shareholders for the benefit of all shareholders. So anything we do has that in mind. We want to maximize the value for our shareholders. We are in a good spot at the moment, having restructured the company, right-sized it with the right assets and people. We now have a good market to operate in. And as you can see, that is producing attractive direct returns for our shareholders. We are not going to do anything to jeopardize that dividend yield or that direct return, as I just went through. If something happens in terms of growing the company, it will be with an eye on continuing to grow the dividends. So what does that mean for consolidation?
I previously said that if you look at the OBN segment, the supply side of the OBN segment, the OBN source segment, then you will not see any company with an optimal size. You will only see smaller players competing against each other. And so there is a strong argument here. There is a strong argument for creating larger players to optimize fleet size and optimize operations, also from an SG&A point of view. That still stands. So to the extent that it is possible to get such synergies out of a restructuring to the benefit of shareholders, increasing the value of SeaBird shares, we will be keen to do it. But that is the premise for such a consolidation.
If we don't see an uplift in value for shareholders, I think the one who asked the question is correct, then the better option is to run the company as is, maybe with an eye to do opportunistic additions to our fleet and just run the company with a very attractive cash return to our shareholders.
Yes, thank you. Also, there is a couple of questions about our relocation from Cyprus to Norway. Ståle, do you want to give some flavor on that?
Yeah. So when it comes to relocating from Cyprus to Norway, it has to do with cost efficiency in service providers that we meet in Cyprus. And it also has to do with, call it, rather technical issues around where our fleet is and in terms of financing. So there are some benefits of moving out of Cyprus. This was the basis for doing it. There are some issues that we are looking closer at before the actual move is happening. So whenever those issues have been put to bed, we will update you on the move.
Thank you. Finn Atle, question about what's the market value of SeaBird's equipment pool? Is there any comments you can make around that? Maybe not exactly market value in dollar terms, but just to understand what kind of equipment we have in our pool.
The majority of the equipment we have is streamer sections for 2D operations. We have two sets of streamer recording systems. There's one on the Eagle and one spare one in our warehouse. We have source equipment to equip one more vessel. I think that's what we've sort of indicated previously. In dollar values, I don't have a number in mind really here and now. Of course, the equipment is not brand new. It's been with us for some time, but it's still workable equipment.
Thank you. And then we have been talking about share buybacks in the previous part. And I guess this also is linked to my answer on the EGM. But how does the board look at share buybacks versus cash distribution, Ståle?
Yeah. So we have previously said that we see that as a part of our toolbox. So either cash distribution or share buybacks really has to do with the level of the share price. I would say, let me put it like this. So the starting point is to distribute our cash as dividends. The reason for that is that it is the perfect democratic way of doing it, making sure that every share owner gets the same benefit. And then shareholders can decide themselves whether they want to recycle that cash into getting more dividends from SeaBird by buying shares or to spend that cash in any other way. It doesn't mean that we want to buybacks. It is still in our toolbox. But I can say that those buybacks will be there to be used when we see a particular good opportunity to put that into effect.
Thank you, and the last question goes on trade receivables. There was a comment that we have $8.3 million on the balance sheet in trade receivables, and if I can comment on that level, obviously, when having a quarterly revenue of $10 million, it seems like a high level. However, if you put into consideration that the average payment terms in the industry is around 30 days, then obviously you can easily see that you can end up with two months of receivables at the time of balance, at the time of the balance date. So with 8.3, as we have, I'm not, as I said, when discussing the working capital, I'm comfortable with the level we have. We have good visibility on our working capital, and it will fluctuate from quarter to quarter. But as I said, $3.3 million positive as we have today.
I'm comfortable, but we are working constantly to efficiently and optimize our working capital, so with that, we have gone through all of the questions. We have gone through the presentation, so I would then like to thank you all for the time this morning, and if you have any questions to Finn Atle, myself, as Ståle, you find the contact details in the press release and on our web pages, so with that, I wish everybody a nice day. Thank you.
Thank you.