Good morning and welcome to SeaBird Exploration's fourth quarter presentation. We are today represented by our Chairman, Ståle Rodahl, CFO Sveinung Alvestad, and I, Finn Atle Hamre, the CEO. With reference to last week's announcements of signed LOI related to the merger with EDrill, our Executive Chairman will give some closing remarks to this presentation. Also, please refer to last week's webcasts, which you can find on our webpage. Let me go directly to financial performance summary. Zero lost time incidents. Operational excellence is key to winning and renewing contracts with the clients. Operational downtime for the quarter at a low 1.7%, which reflects our strong focus on health, safety, environment, and quality. We generated $4.6 million of EBITDA during the quarter.
Our balance sheet is robust with a net debt of $9.4 million and a working capital position of $3.4 million, which we are comfortable with. Valuation: based on current market cap, our enterprise value at 7th of February this year is at about $57 million, implying a conservative asset value of $28 million per vessel. Our forward-looking EV/EBITDA multiples are in a range of 2.5-3, which we view very attractive. In November, we announced NOK 0.3 per share in cash distribution to shareholders, which is due for distribution this week. 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 plus years. Now, with both vessels on contract within the OBN space, we with contracts third quarter this year, we expect utilization to remain in the high 90% going forward.
Backlog: we are sold out to the middle of this year, giving a total of 14 months of firm backlog. Backlog is shared between our vessels, Fulmar Explorer until the end of August and Eagle Explorer to the end of June this year. Eagle Explorer contract includes two six-month options. A few words on the market: OBN market trends. We believe the global OBN market will continue to see growth in the coming years, driven by its key market attributes. Oil market 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 and lifespan of fields. OBN market share has grown from around 10% in 2014 to nearly 50% of total offshore seismic spending today.
We also see continued interest in the OBN seismic data on top of existing 3D multi-client data sets to enhance data quality and value. The supply side has contracted 70% over the last 10 years. On the supply side, there are now only about 14 active OBN source vessels in the market, excluding Russian and most of the Chinese vessels, down from more than 50 vessels 10 years ago. All 14 vessels are currently on contracts. In discussions with clients, it is apparent that securing source vessels continues to be critical, and we therefore expect this year's contract renewal discussions to be based on longer-term contracts. With this, I will hand it over to our CFO, Sveinung Alvestad, to give you more details on the financials.
Thank you, Finn Atle. As Finn Atle said, both vessels were operating with very strong utilization in the Gulf of Mexico this quarter, and hence contributed to a solid financial quarter for SeaBird, something we will discuss more in detail in the coming slides. SeaBird is, as said, sold out of capacity until July 2025, and as such, we expect both revenues and EBITDA to remain at this level, giving continued solid operation in the coming quarters as well. The net profit for the full year 2024 was $6.7 million, which represents a more than doubling from the prior year. This is a level we are satisfied with. The balance sheet remains strong with a 59% equity ratio and a net debt of only $9.4 million.
Hence, today's share price implies a valuation of $28 million per vessel when not attributing any value to our equipment pool, a level we believe is conservative. Lastly, we are on schedule to pay out the NOK 0.4 per share cash distribution to our shareholders on next Monday, the 17th of February. Now turning to the revenues, revenue increased to $10.2 million for the fourth quarter as both vessels operated with close to 100% economical utilization. This brings revenue for the full year 2024 to $35.5 million. The dip you can see in Q2 revenues was due to Eagle having some idle time between contracts and to the mobilization from Singapore to the U.S. Gulf of Mexico back in April.
We note that both vessels have firm contracts until July and September 2025, and as such, we see revenues continuing in this same level as we have shown here. The Q4 operational EBITDA was $4.6 million in the quarter, which is broadly in line with the comparable quarters behind us. The EBITDA adjusted for non-cash operational one-offs for the full year 2024 increased to $15.2 million, which is the best underlying result the company has achieved since 2016 when the company had considerably more vessels under operation. SG&A for the quarter was $1.2 million and $4.1 million for the year, and we continue to see an annual run rate at this level with quarterly fluctuations going forward. SeaBird exited the year 2024 with a cash balance of $4.1 million.
Net cash flow for the year was $1.9 million, whereas operational cash flow of $12.5 million was negatively impacted by an $800,000 working capital build. As Finn Atle Hamre said, the working capital currently stands at $3.4 million, which is a level we are comfortable with going forward. CapEx for the year was $2.3 million and was mainly due to ordinary and planned maintenance on the vessels. Debt service cost for the year was $4.6 million, whereas $2.8 million is repayment of debt and $1.8 million is interest. Cash distribution to shareholders during 2024 was $3.7 million, and we are on schedule to pay the NOK 40 per share, or about $2.9 million, on Monday, the 17th of February. Now to the balance sheet.
We continue to view our balance sheet as robust with an equity ratio of close to 60% and a net interest-bearing debt to operational EBITDA of 0.6 at year-end 2024. Net interest-bearing debt of $9.4 million consists of $13.5 million of gross debt and $4.1 million cash. The maturity of the bank facilities is in mid-2026, and the loan has a quarterly installment of about $700,000. The company is in compliance with all our bank components. With that, I will leave the word to Ståle.
Thank you, Sveinung. To sum up then, as Finn Atle said, solid operational performance continues in SeaBird Exploration. We still have good visibility on cash flow with 14 months remaining of firm backlog, and we have strong hopes for continued contracts before the end of the current months.
The company has a solid capital structure continuing to improve even as we are paying out, as we've said a number of times, all excess cash in dividends, with net debt now being down to around 0.5x annual run rate EBITDA. Also, as we've said repeatedly, we're monitoring opportunities that are accretive to shareholders, and indeed, one week ago, we announced one such opportunity that we have landed on, and which we believe holds significant value creation for SeaBird shareholders. When it comes to the sort of the dividend policy then, we are paying out the NOK 0.4 dividend that we announced in November. As Sveinung said, it will come next Monday, which is an additional, what, 6%-7% yield or so just for the quarter on the current share price.
Due to the merger terms having been agreed, of course, we need to wait for the completion of the merger and for the new board to take any further action on dividends. I will get back to that, but I just want to add already here that a decisive factor behind the two companies finding together is that we share the same view on capital allocation and shareholder distributions going forward. I will get back to that. For SeaBird, it's really all about solid operational performance, still strong earnings visibility, and indeed shareholder distributions that have even improved with the announced merger with EDrill. Next slide, please. Yeah, we can go to the next slide here with a strong. There we are.
Okay, the merger with EDrill, I'm just going to take you through and remind you of a couple of the slides that we showed one week ago. Energy Drilling is a leading tendering operator that controls 38% of the world's active tendering. High market share in a small niche, just like SeaBird. It has a fully contracted fleet with a strong backlog, just like SeaBird. It is present in the world's fastest growing region for natural gas, and it was founded by industry veterans with more than 90 years of combined experience. The Proforma Combined Company shows some very interesting metrics straight from the get-go, with a market cap of $380 million as of SeaBird's close the day before we announced the transaction. That market cap is now moving steadily beyond $400 million.
Net debt of $44 million to be seen against the firm revenue backlog of more than $500 million, a firm EBITDA backlog of more than $320 million, and a free cash flow before financing from that same backlog of more than $270 million. As I said, the decisive factor for the two companies to find together has been a shared commitment to maximize value through shareholder distributions. I will show you some numbers on the, well, I would say projected distributions since it's all more or less backlog supported in a couple of slides. Next one, please. The two companies form into one listed entity with two adjacent business verticals. SeaBird Exploration, the holding company on Cyprus, will be the surviving entity here.
We'll continue to operate on Cyprus, and we will move more activity into that company in order to move to Cyprus tax-wise as well. That is in process. SeaBird and Energy Drilling will form the two subsidiaries below the holding company. SeaBird will print 651 million shares to EDrill shareholders, who will take an 89% stake in the combined company. Expected closing of the transaction is in the second quarter this year, and the transaction is supported by both Board of Directors and the largest shareholders in both companies. I can say it's all shareholders in Energy Drilling, and it's the five largest shareholders plus the Board of Directors in SeaBird Exploration.
I can just add, I am myself one of these five shareholders in SeaBird, and as a shareholder, as well as as the Chairman of the company, I strongly recommend the transaction to all shareholders, and I'll give you some numbers to support that. Okay, next slide, please. That takes us into the strategic rationale behind the deal, which is really to create a dividend champion on the Oslo Stock Exchange. For Seabird shareholders and for all shareholders, really, it has a large benefit in eliminating the single asset risk. It will increase the company's size in capital markets and will probably attract more investors along with that and improve pricing. We will improve the debt financing terms for the combined company, and it will give us an enhanced potential to consolidate our niches further and to act on attractive opportunities elsewhere.
Shareholder interests in these two companies are very much aligned. The focus is on high market share in small attractive oil service niches. Also, we share a view of emphasizing free cash flow to equity and shareholder distributions, and we also share a view of maintaining strong capital discipline and a robust balance sheet. Evidence of that you find in pillar number three in this slide, where you can see that EDrill has a very modest, or had, I should add, at the end of the fourth quarter, adding cash flow every day. At the end of the fourth quarter, conservative net debt level of $33 million, and that is to be compared to an estimated $260 million in free cash flow potential from its firm backlog. On SeaBird's end, it is the same thing.
We had $10.7 million by the end of the third quarter, and we just reported today a number of somewhat above $9 million in net debt, which is around 0.5x run rate annual EBITDA for the company. The contract backlog for the combined company runs well into 2027, and as we will see, the backlog for our merger partner covers a substantial portion of the transaction enterprise value. Next slide, please. Here we can see that the EBITDA backlog from EDrill covers around 80% of the transaction enterprise value as of SeaBird's close before the announcement of the transaction. The cash conversion is really strong, as you can see from the free cash flow coming from backlog, and the balance sheet is really strong as well. All this bodes well for the combined company's ability to pay future dividends.
A lot of the backlog here for both companies, but in particular EDrill then, which is important for the overall level of cash flows, is due to come over the next two years. What we've done here on the slide on the middle of that page is that we have compared Energy Drilling to a peer group of nine drilling companies with numbers from DNB Markets. What we can see here is really that our merger partner stands head and shoulders above the rest when it comes to its free cash flow generating capacity in the near term, near term being 2025 and 2026, covering almost a double of the enterprise value from free cash flow compared to the closest peer and three to four times what you see as an average for the peer group. We think these are major benefits for SeaBird shareholders.
When it comes to SeaBird's dividend potential then, now the stock is up a bit, but still calculating from the closing before the announcement and adding the NOK 0.4 dividend that you will get next Monday, the dividend potential on top of this is significant indeed and will allow the company to pay out more than half of its share price over the next two years. Next slide, please. Yeah, just a quick look at the backlog coverage for EDrill. As we can see here, the backlog is all but supported for all of its rigs apart from EDrill- 2, where expectations are for more contracts to be announced before long. What you see here is that basically 2025 and 2026 is all covered, and we also stretch well into 2027 on two or three of the units here. Yeah, there.
We can look at the next slide, please. This slide shows you, without taking into account EDrill- 2 and the recontracting potential here, it shows you the backlog, or it shows you the firm backlog coming from the other units here. Looking at that backlog, it gives a total cash available for debt service and equity distribution of $290 million when including the current cash of around $30 million. Subtracting the debt service in the period takes us to a number of $216 million coming from Energy Drilling as cash that would be available for equity distributions. Here, I should add that there is no provision made for improvement in the financing terms for the company.
So $216 million in cash available, that adds up to around NOK 3.3 per share for the combined company with 731 million shares. Adding then the EUR 0.40 that you get next Monday, that takes you up to more than NOK 3.7 that are dividends that are already announced or that have a firm backlog behind them. With this, I will end the presentation on the combined company. Just to end on a note saying that we are really pleased to be able to present this transaction to our shareholders, and we look forward to the EGM that we will get back to you on with a specific date. With that, I hand it over to you, Sveinung.
Thank you, Ståle. First, I think I'll play the ball back to you, Ståle.
There is a couple of questions regarding the proposed merger, and also you touched upon it, especially around the dividend from SeaBird. Maybe you can just elaborate a bit more around the dividend and why we do not announce any or propose any new dividends for the fourth quarter.
Yeah, the reason we don't propose any new dividend is simply that the merger terms have been set, and it would be a real mess if the two companies start to distribute cash on their own after the merger terms have been set. We have been able to include the NOK 0.4 that was already announced in November in the merger terms, which we are pleased with, but of course, no new announcements will be made now until the two companies have effectively combined and the new board is ready to take action on that.
What I can say and what you will see from these numbers is that the two companies have a shared vision about extending SeaBird's dividend policy, which is to pay all excess cash on a quarterly basis. That will continue. We are committed to that. As I also shown you, there is a significant cash flow coming from a firm backlog in these two companies. We are confident that the ability to continue to pay substantial dividends, I would say very, very competitive dividends compared to the sector that we're in, is definitely there, and we expect that to continue.
Thank you. I jump over to you, Finn Atle Hamre, on a couple of SeaBird-related questions. First, there is some question about the option we have on Eagle.
Can you say anything about the levels, the rate levels we have on that one, and when we expect to be enabled to announce something to the market regarding that?
Yeah, sure. The options need to be called two months before expiry of the firm period, and yeah, there is an adjustment to the rate, which is 5% up per period, per six-month period.
Good. Can you elaborate a bit where do you see the OBN day rate market in general now? Do you have any reflections around that?
As we've alluded to before in previous presentations, we believe the market is sort of strong. Supply side is limited, and demand remains strong, so we believe rates should increase. Really difficult to see how that develops.
Truth is in the pudding, I guess, when we've signed contracts, but we expect it to increase in sort of areas where we've alluded to before. I don't want to sort of elaborate and give a pinpoint number on that one, obviously.
Understandable. Also, there is a couple of questions relating to the flexible charters. Do you see any vessels available in the market, and how we have talked about this quite extensively over the past few years, and maybe you can give us a short update of what you see there?
Yeah, I guess we touched upon that one previously also. Currently, there are no immediate vessels available for flex charters that we could sort of take out and makeshift install our equipment on and have ready on short-term notice.
Vessels have been laid up, potential vessels out there which have been laid up for quite some time, and there is a substantial amount of CapEx related to take these vessels into service again. I think that is also why we have removed some of the comments related to flex charters in our presentations. The market has changed over the last year, year and a half, where the vessels we saw back then are removed completely from the service offering into source vessel or seismic at large. It is a more complex picture than it used to be.
Thank you. There is a question about our very strong 99% utilization for the quarter, and the question is, how has SeaBird managed to achieve this stellar performance of 99%?
It is not one single thing that we have done.
I think it's more about cooperation between the shore organization, the seismic team on board, and the maritime marine crew on board, where we're all working as one team. It's the SeaBird team that flows through whatever we're doing. If there are issues to be solved on the seismic side, we all put our heads together to assist them, and then similarly with the marine crew on board, and to share that strength between ourselves to understand the challenges between the different departments. I think that's where the key is, really. It's long-term work. It's the team effort, really.
Yeah, thank you. There is a question of what is the SeaBird's vessel utilization so far in Q1? I can maybe give a short answer here. We still see utilization in the high end of the 90%.
We are very pleased with the performance we have had year to date as well. Also, there is a question which I will cover. Can you elaborate on the adjustment for the EBITDA? As I wrote in the report, the provisions we have taken which hits the EBITDA is a legacy receivable we have had on our balance sheet for one, one and a half years now. During the audit process now, it has been prudent to write this down, but that does not mean that we still chase and try to recover these receivables. As we said in the presentation, our working capital stands at $3.4 million at year end, and that is a level we are comfortable with going forward as well. However, we are obviously going to chase every receivable we have and have had on the balance sheet previously as well.
Okay. Yeah, there is quite a few more questions, really specific questions related to the mergers. I think I want to reiterate what Finn Atle Hamre said in the opening. We had an extensive presentation on the 3rd of February going through all of the elements with the proposed merger and where the Energy Drilling management presented as well. I would like to refer back to that presentation which is available, both the webcast and the presentation material on our web pages. I think I will leave it with that for that matter. With that, I think really we have answered out most of the questions on the call, and with that, I think we'll thank you all for the time and say see you next time.