Good morning, everyone, and welcome to this Q2 conference call for Green Energy Group. My name is Ståle Rodahl. I'm the chairman of the company. I'm here or at different occasions with Finn Atle Hamre, the CEO, and Ståle Monstad. Ståle Monstad, the CEO of Green Minerals. Agenda today, we're going to talk about the strategic review that we have had going for some time. We will have an operational update on the two businesses. First of all, it was a very busy summer, as most of you know, who follow us. I'm pleased to say that the company has been able to deliver on its strategy on several fronts.
Most importantly, in Green Minerals, establishing an industrial framework through the agreement with Oil States Industries, establishing a world-class consortium then around the company. Oil States will take a 4.3% ownership in Green Minerals, with shares issued at NOK 15 per share. In seismic, as you know, we had the bid for the entire seismic business at $53 million. That was put on hold. Since then, we've had a very busy period in the company. I'm very pleased to say that we have been able to sign up two key contracts for the Eagle and Fulmar, securing a total of 23 months of backlog with an estimated $80 million in EBITDA contribution.
We have sold the Petrel, and that transaction was finished as of yesterday. This will allow the company a rapid repayment of debt. These are major strategic advances during the quarter, which gives impetus to finally separating the minerals and seismic businesses as we've talked about before. On the strategic review, just a quick recap. On the 26th of January, we announced that such a review would take place. On the 28th of April, we announced that we had entered into a letter of intent regarding a sale of the company's seismic operation for a cash consideration of $53 million. On the 30th of June, we announced that an agreement had been reached, but it had to be put on hold abruptly due to events outside of both parties' control.
On the 18th of July, we announced that we had reached an agreement to sell the Petrel Explorer. On August 16th, the board received a letter from its larger shareholder, MH Capital, urging a separation of the two businesses. On the 29th of August, this Monday, Green Minerals announced a memorandum of understanding with Oil States Industries, establishing an industry consortium. Finally, today, we announce an intention to separate the minerals and seismic businesses by way of spinning off Green Minerals to shareholders. This will give shareholders access to two pure exposures, one in minerals and one in offshore seismic. We believe that this will contribute to a more efficient pricing of both the companies. Also importantly, it will create a better platform for ongoing industry consolidation, as we have talked about previously.
When it comes to capital allocation and funding, just want to say a couple of words there. First of all, as previously, all holdings are funded separately. Of course, with the split, this will be even more pronounced. This has been the case all along, as both of these businesses has needed capital. Now the situation is that the cash flow profile of the two of them will be somewhat different. With SeaBird starting to generate cash, this will be used for repayment of debt and dividends and buybacks. Indeed, we asked for a buyback authorization in the AGM earlier this year, and this was approved. When it comes to Green Minerals, the strategy here is to position for a license win with a minimum capital use.
In this context, the OSI agreement is important for the company. The costs here are to be covered by the consortium partners. When it comes to the actual production system, we've had a few questions on this. We are targeting a model similar to the one that we've established now for the concept study. Green Minerals will not fund the production system in itself. Upon license win, upon an expected license win, I could add, there will be additional funding required. This will be to conduct the exploration campaign for the company. We've had some questions about how much this will be, and it's hard to say. We haven't designed the actual exploration campaign yet.
To give you some figures to hold on to, we would estimate in the area of $30 million-$50 million. This will be after license win. We aim to source that funding through our partner network or with new equity. The pointer is that while the holdings have been funded separately all along, separating the businesses will create clarity for all shareholders, in the phase that we know going into. The Company with this is ready for the next step, with the Green Energy Group then aiming to distribute the Green Minerals shares, in the Q4 this year, pending all other closing conditions. Green Energy Group will then become a pure play seismic company.
As I said before, cash will be used for repayments, dividends, and growing the business in case we can find attractive transactions to participate in. Green Minerals to position them for a license win that we expect to come in the Q1, 2024, with the authorities opening up for marine minerals in the Q3, 2023. That time schedule is unchanged. Importantly for Green Minerals, an agreement with a Green Energy Group or SeaBird Exploration on everything HSEQ, maritime, operational, everything in regards to survey licensing, admin, reporting, et cetera, will be assigned then with SeaBird Exploration. With that, I hand it over to you, Finn Atle Hamre.
Thanks, Ståle. Highlights for the Q2, reflecting the relatively low utilization. We had a loss, EBITDA loss of $1.2 million. However, still remaining a strong balance sheet. During the quarter, we had one contract signed for the Fulmar. Subsequently, we had one 2D contract for the Eagle and the sale of the Petrel. We have now also in the last few days signed an MOU, as Ståle indicated for Green Minerals with the Oil States Industries, and there will be more financial information. Next one, please. Ståle, you flip to the next one. Key figures. As we already indicated, a loss of $1.2 million, but strong outlook. Most of interest here is the net interest-bearing debt of $49 million.
Now we have a position of strong contract coverage. I believe this is the best we've seen since 2015. We have reduced our SG&A from about $2 million two years ago. Now it's $1 million per quarter. A significant improvement in the cost base. We've included one slide here more for reference to indicate the history of our current fleet and now the state. I'll leave that as it is. I got any further comments. Revenue. We see the key points here is it bottomed out in the Q2 of 2021, and with focus on the trend line, the last 12 months, we see a positive trend going forward, and we believe this to continue.
Reflecting the same in EBITDA, bottoming out in the Q2 in 2021 and a positive trend since. We believe this will further improve going forward now with the sale of the Petrel. Market trends, similar slides and information that we've shared before, but I think what's of key importance here is that we see maybe less number of tenders and requests for quotations, but the requests we receive have longer duration. I think that's a key for profitability going forward also. Securing longer and stronger contracts over time saves us time between contracts. Improving market.
We've moved. SeaBird's moved from a somewhat asset-heavy position with older vessel to an asset-light and renewed fleet, improving our company for operating leverage also with the flexible fleet and equipment we have to do that. We've seen this slide before, I believe. Implied market value of our fleet today of about $15 million using an economic value-based net present value. Depreciation would imply a 4x value of that. There's certainly a lot of hidden value there. Key from restructure to cash generation and highlights the graphs on the right-hand side of this slide.
We've got a reduced SG&A, low break-even point, and improved quality of our operations, which we believe will create and it will be creating a solid platform for profitability going forward. Thank you. I'll leave it for Ståle Monstad to continue with the Green Minerals slides.
Thank you very much, Finn Atle, and good morning, everyone. Green Minerals, if you go to our previous one Ståle, just a comment on that one, is a company that is taking the entire value chain into consideration. Everything from exploration to production, transport, and processing, onshore. This is also reflected by the fact that we have entered into the consortium that is designing a production system from ore at the sea floor to port. Next, please. The highlights of this quarter is the MOU signed with the Ocean Yield consortium. We have also received a large amount of data released from the Norwegian Petroleum Directorate, and we started integration into the exploration framework of Green Minerals.
We're still working on the rock characterization study on actual seafloor massive sulfide material from the Atlantic. When it comes to the run rate or burn rate of the company, we had NOK 2.5 million in Q2, and we expect that to be sort of on the mark going forward as well. Ståle already touched upon this consortium. It is very important because it is a consortium that will cover most of the sort of disciplines needed for an effective and successful production offshore. It will start in October this year. Norway is at the forefront. We're one of the first companies that is likely to open its exclusive economic zone. But there are also going on some activity internationally.
We have the International Seabed Authority, which is taking care of the sort of international waters, but also Cook Islands have opened up their exclusive economic zone for deep sea mining. Interestingly enough, if you look at the one is the Moana Minerals when they took one of the three licenses in Cook Islands, that actually triggered consortium to take a minority stake in the company at an estimated value of $10 million in cash and $10 million in kind. It's interesting to look at the valuation of the company, which is now indicated at $125 million for relatively fresh company with one license in the Cook Islands.
The table to the right compares Moana Minerals and The Metals Company and Green Minerals. We expect also like Ståle said to win at least one license when it's opened up in Norway. The market cap is expected to rise accordingly. Next, please. The roadmap towards exploration. As it is now, we have an impact assessment that's being carried out by the authorities. Importantly as well is that all the dates that has been sort of scheduled is kept. This timeline is holding up so far. We expect an opening decision to be taken in the parliament in Q3 next year, and a very quick turnaround to announcing a license round and a license award.
This makes it possible to have a pilot production going on in Norwegian waters already in 2026. Next, please. The key milestones for Green Minerals in 2022 was presented in the previous quarterly presentation. We have completed the research cruise together with the university in Southampton, and the results are not final as yet, but the preliminary results are very sort of interesting and encouraging actually. This is the cruise that went to the Atlantic down in the TAG area on seafloor massive sulfides. We're still working on the rock characterization study, which will be sort of the first of its kind and will make it.
It's a very important step towards blending marine minerals together with onshore minerals in the existing processing facilities onshore, which is a very important sort of CapEx reducing factor to have to be able to use existing processing facilities. The NPD did release data as promised in early June, which is good news for us, who is a geologist and also interested in taking part in all that research that has been done. It's a huge set of data with a very high value that has been made available to Green Minerals at no cost at all. We continue to work on partnerships.
We are gonna be an asset-wide company, and we will form partnership in through the entire value chain of deep sea mining. Next, please. So just a little glimpse into the NPD data and what we have done with it so far. This is an image of the Loki's Castle and Mohn's Treasure discoveries that has been made by a university in Bergen in along the Mohns Ridge. And it's quite detailed and at least in parts of the Mohn's Ridge, very high-resolution data available now for us, and we have started to integrate that into the workflow. I won't actually go into the different sensors used, but the value of these data are quite high.
This is one of the qualities of being in Norway that actually the authorities are releasing data as they come in, which is to the benefit, of course, for everyone participating in the industry. We're quite happy and it's very interesting to look at all the data that just received. There's a lot of data that takes some time to get it all under our skin, but we are getting there. Next, please. The aspiration targets, it is still a plan for a pilot system to be ready to operate by 2026. We intend to do the processing in the Nordic countries, which is why we do the rock characterization to prepare for that.
There are a number of different options and possibilities, but a short transport distance from the production offshore to processing is important from both commercial and environmental point of view. We will, of course, also have an immense focus on the ecosystems and biodiversity in the area where we operate. We intend to be able to be in a full-scale production at the earliest at 2028, which might be a stretch target, but towards the end of this decade. The revenue sort of looks still very promising for this industry. If we assume a 1.5 million tons per year production of ore, we're looking at EBITDA above 50%.
Since the start-up of this happened quite a few things which is important for Green Minerals and for the industry. First of all, Hurdalsplattformen, which is a political platform of the new government in Norway, specifically mentioned the need to increase the mapping of minerals and metals, both onshore and offshore. The LO, which is the workers union, is also very positive towards this industry. Green Minerals have established a good technical team, and we have started entering into important partnerships. To add on to that, like I said, we have released a huge amount of data from the cruises that have been conducted by academia and authorities, and more data will come.
This gives us a very good chance of getting a good understanding of the geology and prospectivity before we start the exploration campaign. Lastly, the timeline is kept. The authorities are keeping the timeline. They're putting pressure on, and they are doing as they plan to do, which is very good news for us as well. Next one, please. I think I hand it back to you, Ståle Rodahl.
Yeah. I can sum it up there, Ståle. Thank you. Just in summary then, the company is reporting a net asset value of $6.5 per share as of the end of the Q2. This NAV is based on book values on our seismic assets only, and then market value on Green Minerals. As I said, I think the major point here is that the company has made really great strides and had major strategic advances over the summer. This is both in the minerals business and in the seismic business. That enables us then to finally separate the two businesses. We've seen key contract wins in OBN and 2D, as we talked about.
The visibility that this gives is sort of unprecedented for the company, at least seen over the last many years, at least the last nine years. Green Minerals signed an MOU with an oversight net consortium. Oversight becomes a shareholder. I'm really pleased to announce this agreement. The increased industrial ownership of Green Minerals through this. SED announces today a spin-off of Green Minerals to shareholders, targeting Q4 distribution. The outlook for the marine minerals and seismic businesses remain very positive indeed.
We haven't spent too much time on the market today, but we certainly are seeing very promising signs in seismic then for continued rate increases. In the minerals business, there is a gap between planned projects, especially in terms of the green energy transition and the actual minerals available for this. It certainly looks like a bottleneck that Green Minerals will try to help solve over the next few years. Lastly, as before, we want to end this presentation by stating that we are running a return-focused business model with emphasis on capital efficiency and the lean organization. This company is managed by shareholders for the benefit of all shareholders.
I think today's news on the way we intend to run these two businesses going forward certainly underlines that statement. That concludes our presentation, and we'll open it up for Q&As. Are there any questions that's come in?
Yes. First, we can take a couple of questions on Green Minerals. The first question is which companies are investing in the marine mineral business now? Ståle, I guess that's for you.
That's a good question. We have seen this industry has developed a lot only since we started up two years ago. That was at the very early point. There have been lots of developments since then. I think it's interesting to see that companies like Maersk have invested significant amounts in this business. Allseas, Transocean, have started as of this year to invest significant amounts. Technip is doing the same. DeepOcean is involved and is investing in the business. We've just announced our consortium, so Oil States Industries is investing in this business. Of course, DEME is investing and has been doing so for many years.
DEME has probably invested more than $100 million into this business already. These are all solid companies, and we are very pleased to see their interest and to see their commitment towards the marine minerals business.
Thank you. This question goes to Monstad. When do you expect to get the rock analysis return and be able to share that with the market?
The analysis is entering into its final stage. There's been a slight delay due to some power problems at the laboratory. We expect to have the results next month within the end of September.
Good. This, Ståle Rodahl, I guess is for you as well. What is the main risk with Green Minerals?
The main risk with Green Minerals is, of course, the milestones we need to go through here is number one, Norwegian authorities need to take an opening decision. We expect that to happen in the Q3 in 2023. What I can say there is that the NPD has informed that they will be ready with all the material going over to the Parliament, and they will be ready doing that in the Q1 of 2023. In principle, I guess that decision could happen in the Q2. The authorities have been working really well on this. There has been great visibility, I think, in the work that has been done by the OED and the NPD.
We've been really happy to work with them on this process. I think everything is there and all the parties, as Monstad mentioned, have voiced positive opinions about opening for this industry. We definitely think it will happen. I think Monstad touched upon this as well. I think the fact that the timeline has been more or less locked since we started two years ago in itself is a very positive sign. But that is one risk.
The other one, major risk, of course, is for this company, for Green Minerals, to actually win the license provided that the NCS is opened. On that note, our opinion is that Green Minerals has a first-mover advantage. We were the first ones out there. We've capitalized the company, made a commitment to this. We've been working with the authorities, and with our partner network, for the last two years and put a lot of effort into this. We feel that our first-mover advantage has led to a leading position on the NCS.
We certainly hope and we think that that would be reflected in the license awards, when they come sometime between Q3 next year and Q1 2024.
Thank you. We will jump over to the seismic business. We have a couple of questions regarding consolidation. Maybe you, Ståle Rodahl, can give some color on what we see in terms of consolidation and if we are still engaged with talks with other parties.
Yeah, right. We didn't spend much time on that from the prepared presentation, but the announcements that we made basically speaks for the advances there. What I can comment in addition is that what we said then on I guess it was the 30th of June was that the cash bid for the seismic operation had been put on hold. We have not received notice that it has been taken off hold. By definition it's still on hold. Of course, the company has made great advances since that bid was launched and now has.
I basically think that the pricing there needs to be seen up against the contract backlog that we have. I think anyone would see that the price certainly well could be higher if that bid came back on the table. That is my opinion at least. We also announced that the exclusivity had lapsed and that we then would enter into talks with other potential suitors. That has also happened. Our goal, which is to consolidate, in particular the OBN segment, still stands. We hope to be able to do just that.
We don't have anything firm to announce to you yet. This is a process that's been moving ahead. I would say now in hindsight it has been moving slowly ahead. We started these discussions more than a year ago, and they are still ongoing. As you understand, there is progress. There has been one concrete offer coming out of this, and we just wait and see what happens going forward. The initiative from our side is still ongoing. We hope to be able to announce something before too long.
Thank you. I have a couple of questions to Finn Atle. Now as you are sold out of in-house capacity, there is many questions about when we can expect new contracts to be announced and what's the status of leased-in or chartered-in flexible vessels?
Yeah, good questions. We are just now operationally working hard to get the Fulmar starting on the first job and also the Eagle to start her job, the 2D job in India, which takes a lot of effort from the organization operationally. Commercially, we are working on flex charter arrangements and discussions with both clients and both owners. Difficult to really predict when these can materialize. We need to tie it in with operational and administrative capacity. I think realistically, hopefully sometime this year, without giving a sort of too defined date on that, but certainly something we're working hard on securing now and on as soon as we get the other buses working, yeah.
Thank you. There is a couple of questions regarding CapEx levels. Can you give any expectation of where you believe the CapEx will be in the coming quarters?
Quarter by quarter, we don't have a number. We look at the CapEx investment on each vessel on an annual basis. I think we've indicated previously it's around $600,000 per vessel in CapEx. Certainly when we're looking at flexible charters, there might be items that we need to pick up there that we don't foresee in our predictions just now. That's in the region we're looking at for our budgets.
Thank you. In regards of the completion of the Petrel Explorer sale, can you give some color about how you will use the proceeds from that sale?
Most of the proceeds will be in payback of our mortgage bank mortgage. There will be NOK 1.3 million-NOK 1.4 million returned to the company as cash.
Very good. I think I have one more question for Ståle here from the Green Energy Group perspective. When will we have the subsequent offering in GE?
Right. So the subsequent offering will take place as soon as possible. Just to update you on that, we will call an EGM for a few businesses that need to be conducted. In that, amongst others, we will be asking for authorization to issue shares that will be in there. There is this usual process with the authorities on that. We expect to be able to handle that by certainly the early part of Q4.
Thank you. One more on the seismic market. Can you, Finn Atle or Ståle, give us a bit more flavor around the market for the source contract and 2D contracts? Where do we see rates at the moment, and what do we expect to see in the coming three to six months?
Right. We can, I guess, flip back to this slide. I guess the question is more or less in relation to this one. We have at SeaBird, we haven't been guiding the market on rates or our own backlog or EBITDA going forward. The reason simply being that visibility has been really low. In March this year, we decided to design this slide then and to talk a little bit about our expectation for the market. The reason was simply that we saw emerging market trends that were really strong and that we felt that we had an obligation to update the market on.
What you see on this slide then is that back at the last peak, which was in 2013, the market was paying around $85,000 for an OBN vessel, returning about the $20 million EBITDA for such a vessel back to the owner. In 2020, at the market trough, rates were around $30,000, returning hardly a couple of million dollars back to the owner. Now, mind you, these are vessels that today easily cost between, well, if you look at the Fulmar, for example, you could easily get to between $70 million-$80 million construction cost, all included. If you look at a vessel like Eagle, we are talking about well above a $100 million for a vessel like that.
The $10 million should be seen in that context. The market improved then in 2021, and in March, we went out and guided the following. That is that we see rates going to a level around $60,000 for the second half this year, with the utilization around 80%. I'm very pleased, and I mentioned this on the Q1 call as well. I'm very pleased to say today then that what we guided then has actually already happened. Not necessarily in terms of the rates utilization, the mix might be a little bit different.
If you look at our guidance for the contracts that we've achieved, you will see that necessarily, the EBITDA guided level per OBN vessel in the double digits is already there. We're really pleased to see that. The question is, okay, what now? We don't see any. What we see is that, the OBN market, as we said, is sold out. Our capacity is certainly sold out. We will try to do more, as we said, and we think we can do more, by doing partnerships on flex capacity. We don't see any, and in particular in relation to new building cost.
We don't see any reason why rates couldn't reach at least the previous cyclical high around $85,000. Certainly. For every $10,000 that you increase this rate, you increase the expected EBITDA potential then per vessel with in order of $3 million-$3.5 million. That is certainly an interesting outlook, and that would take us back to the EBITDA that we saw on these vessels in 2013. By all means, we are not there. We don't have any concrete guidance that this is going to happen or that we are signing contracts on that level.
As a matter of looking at where the market is now, looking at the tendering activity, and as Finn Atle mentioned, longer duration on the tenders, it's we certainly see no reason why we wouldn't go where the market was when it was tight, at the last, in the last upcycle. I don't know, Finn Atle, do you want to add on that?
No, I think that's pretty much covers it, Ståle.
Thank you. I see we have time for one more question before rounding off. I think this goes to the scheduling of the contracts. Finn Atle, maybe you can give some indication of when you expect both of the contracts to be working and fully contributing to the group's P&L.
Well, we expect Fulmar to be on hire now any day this week. Eagle, we expect to be on hire starting the 2D contract in India late September, first few days of October.
We just has a bit of payment terms, so cash starting to roll in in October, November.
Okay, thank you. We hand it back to you, Ståle, for closing remarks on.
Yeah. Well, if there aren't any further questions, I guess we've gone through all the major points that we had for today. I guess I just want to end this where I started it, and that is that we have seen major. I think this is really the main point for the company. We have seen major strategic advances for the company over the summer. We have seen this both in seabed exploration, in the seismic business, and we have seen this in Green Minerals. These are really all events that is changing the outlook for these two businesses.
That is strengthening the outlook and changing the outlook up to a higher level. I think that is really the main point to take away from this. We are taking the consequence of that now by doing something that I guess started with the Green Minerals shareholders asking for a separation of the business. That is now also true for GE shareholders that would like to see a pricing of the seismic business on in its pure form. Now we're able to do this. We are really pleased to have come to this stage. We look forward to executing on this.
With that, we'll call it a day, or we'll call it a presentation at least, and we'll see you again next quarter. Thank you very much.
Thank you.