Good morning, everyone. My name is Ståle Rodahl. I'm Executive Chairman of SeaBird Exploration, and I'm here with our CEO, Finn Atle Hamre, and our CFO, Sveinung Alvestad. Before I hand it over to them, I just want to make some initial remarks, and before I do that, just a heads up on the Q&A function in the webcast, so you can put questions in there, and then we'll answer at the end of the call. When we distributed Green Minerals to our shareholders in January, we said that we hope that this would only be the first of many such to come from SeaBird. On the heels of significant revenue receivables to be released over the coming months, a solid two-year contract for the Fulmar Explorer, and a debt refinancing, taking maturity to 2026.
We are pleased to guide today for a new round of significant distributions to take place end 2023, early 2024. The exact timing and amount is dependent on the timing of the release, the employment status of the Eagle Explorer, and of course, operational performance under the contracts we are engaged in. With the Eagle turning in another back-to-back contract following the large 2D project in India, and considering continued strong interest in the vessel from several projects, we have no reason to believe other than that she will swiftly mobilize for a new project following the SPS for September this year. Just a quick comment on our flex strategy.
In general, the markets we operate in are continuing to tighten, and with that, we have been informed that some vessels that would fit our flex strategy would be sold for prices that are significantly higher than those implied by the market value of our shares. Therefore, while still monitoring opportunities for accretive growth and certainly being hopeful that we will be able to conclude business on this, we believe there is no more accretive use of our cash flow than to buy back our own shares. Finally, I'd like to thank everybody at Team SeaBird for your unwavering commitment to get the job done, also when the seas are rough. With that, I hand it over to Finn Atle and Sveinung, please.
Thank you. SeaBird Exploration provides marine seismic acquisition with a current fleet of two 100% owned vessels. The Eagle Explorer is currently equipped to perform both 2D streamer acquisition and source services. Currently, the vessel is performing OBN source work. The Fulmar Explorer is equipped for seismic source services, currently engaged in projects in the Gulf of Mexico. In addition, we have seismic equipment to recharter vessels, which again enable SeaBird to relatively quickly increase its fleet by up to two additional vessels with a limited capital expenditure. Next slide, please. Second quarter, 2023 key events. First of all, 3rd consecutive quarter with a positive EBITDA. Operational, good performance overall, somewhat affected by matters outside our control during the 2D operations in India.
We would also like to highlight the two year contract starting in the 1st of September this year for the Fulmar, which gives us good visibility at healthy project economics. Financials. Our CFO will elaborate on these numbers, but I would like to draw your attention to bank financing now being secured until June 2026. Also note that 3rd quarter EBITDA will be adjusted due to events outside of the company control. Again, the CFO will elaborate on this topic. Next slide, please. Contract coverage and backlog. We expect Eagle to complete the production on current project in early September. Thereafter, the vessel will proceed to Singapore for her five yearly Special Periodic Survey and dry docking. This is estimated to take about three weeks. Fulmar Explorer has secured backlog into September 2025 and is performing very well. Outlook.
Delivery on the backlog, coupled with interesting leads, both 2D and source work. We are positive that we will secure work for the Eagle in the near future. We are entertaining discussions for flexible charters, which will be tied to leads we are working on. Next one. Utilization. Second quarter utilization was affected by operational matters outside our control during the 2D operations in India. This reduced utilization slightly during the quarter. Otherwise, we're very happy with the performance and operations and utilization overall. Next slide. A few words on the vessels or assets. Eagle Explorer, currently equipped for 2D streamer operations and source operations. The vessel has performed excellent during recent 2D project and is currently doing source work in Malaysia.
The vessel was built in 2009 and is now due for her third special periodic survey and dry docking. Outlook, interesting leads on both 2D and OBN source market. Next slide. Fulmar Explorer. Vessel is a dedicated source vessel for OBN surveys. Vessel has performed excellent during her recent projects and secured backlog until September 2025. Worth noting that the vessel has not only operationally and technically performing well, but she's also proven to be very fuel efficient for the operations at hand. Fulmar's next planned dry dock is in 2026. A few words on flexible capacity and our equipment pool. We reiterate our ability to charter in available vessels and to equip these with from our equipment pool.
This slide is meant to give you an understanding of how this would be done structurally and how, and our related considerations. Worth noting that available tonnage has been reduced, sold over the past few months at valuations that our current share price do not justify, and a few vessels have been sold out of the market, completely. We continue to have dialogue with several vessel owners, but remain firm that we will not take on the risk of a third vessel without having substantial back-to-back agreements with clients. Next slide, please. Market development in short. Market trends and indicators are strong. Third party analytics continue to guide industry growth in both OBN market and conventional streamer market.
In particular, we see strong demand, tender activity, OBN surveys in all major regions, and as more and more OBN baseline surveys are done, we believe the volume of projects in this market will stay healthy in the years to come. Next slide, please. Supported with the leads received on our, on our end, market trends based on actual leads received by SeaBird. Number of leads remain at high level, normal seasonal changes seems to have small effect on the demand. Again, we see clear trend that leads have a longer duration and operators want to secure vessels for longer term charters. The tender mix between 2D and source seems to be more or less the same as before. Next slide, please. The source fleets. As I alluded to earlier, there has been some changes in the available fleet and the mix of fleet.
There's been some transactions, vessels have been sold, and we've adjusted the current and available fleet. There's a strong demand for source vessels and few available. Those available now are of old age, most of them, but there are still some available or becoming available in the future. We have a strong lead and working on these with the various ship owners. Then I would like to hand it over to our CFO, Sveinung. Please go ahead.
Thank you, Finn Atle. Turning to the financials. Revenue for Q2 was $9.7 million, up from $3.5 million the prior year quarter. Revenues for the first six months of 2023 was $19.6 million, compared to $8.5 million for the same period in 2022. EBITDA was $4.6 million Q2, up from $-1.2 million in 2022. For the first six months it was $8.9 million, compared to $-1.1 million in the previous year. Net profit of $2.1 million was recorded in the quarter, up from $-4.6 million in the same period in 2022. Net profit for the first six months was $9 million.
That was positively impacted by a $5 million non-cash gain related to the distribution of shares in Green Minerals during Q1. The comparable figure for 2022 was a lo- loss of $6.5 million. Cash flow from operation was $0.9 million, while net cash flow after CapEx and financing activities was negative $0.3 million. Net interest-bearing debt was $15 million, down from $19.4 million in the prior year period. To the looking forward. As, as Finn Atle stated earlier, we expect some one-offs in Q3. This is due to events outside of the company's control. We estimate a non-cash impairment of receivables of around $2 million, which will affect the Q3 EBITDA.
This relates to the project we recently completed in India, where the result was negatively impacted by foreign fishing activity that added cost to the project and reduced total volume. We continue to see the full year SG&A of approximately $4 million with quarterly fluctuations. We expect a strong financial performance to continue, resulting in further strengthening of the balance sheet and substantial release of working capital in the coming months. The company is now approaching the next phase, which will enable shareholder distribution. After a challenging 2022 with declining revenues, Q4 marked the inflection point for SeaBird. Q2 has continued the same, at the same pace. Strong utilization during the quarter resulted in revenues of $9.7 million. This contributed to a continued upward trend for the trailing 12 months revenue, which now stands at $31.3 million.
This is a level SeaBird has not seen since 2020, when the company operated 7 vessels. More importantly, the profitability remained solid as well. Q2 EBITDA was $4.6 million, up sequentially from $4.4 million, and from -$0.9 million the prior year quarter. The rolling 12 months EBITDA increased to $10.8 million, substantially increased from the prior year quarter, and is now at a level not seen since the downturn hit the oil and gas industry back in 2016. At that time, we had five 2D vessels operating on contract. That said, we continue to believe there is still upside to this, as we are executing on our solid backlog and as the market fundamentals continue to develop favorable. SG&A for the quarter was $0.7 million, broadly in line with our full year guidance.
Now to the cash flow. As you can see from this chart, SeaBird started the quarter with a cash balance of $2.5 million. Operating cash flow for the quarter, when excluding working capital, was $4.7 million. Working capital position increased during the quarter, mainly due to revenues being tied up in the Indian project and reduction of trade payables. We continue to have a strong focus on the working capital situation and are actively working to convert our position to cash continuously. Thus, we expect to see an unwinding of this over the coming months. Capital expenditures for the quarter was around $400,000, which is a mix of normal maintenance and preparation for the dry docking of Eagle in Q3. Furthermore, we repaid just north of $300,000 of debt during the quarter and paid about $400,000 in interest.
Please note that this is lower than the previous quarter, as the refinancing closed in July and one of the scheduled repayment was done in Q3. All of this leaves us at a net cash flow for the quarter at negative $300,000 and a cash balance of $2.2 million. Net interest-bearing debt at the end of the first half of 2023 was $15 million, where the gross debt stands at $17.2 million. The debt comprises $14.6 million in bank financing and $2.5 million in interest-bearing equipment financing. We have reduced our net interest-bearing debt by $9 million, or around 40%, over the past 6 quarters. Please note that the refinancing of our bank facilities were finalized during July and is now comprising of one loan facility of $14.2 million and one guarantee facility.
The maturity of the facilities is in mid-2026, and the loan has a quarterly installment of $0.7 million. The equipment financing relates to a purchase of equipment during the upgrade of Fulmar in 2021, 2022. This has previously been included on the balance sheet under other payables but was reclassified to interest-bearing debts in 2023. The loan carries a fixed interest with voluntary repayment profile. With that, I leave the word to Ståle for closing remarks.
All right, thank you, Sveinung. I think we can move... Yeah, there we have a summary or strategy slide. Thank you. Yeah, as you've heard, Sveinung talk about strong operational performance. And I was just thinking when I heard the presentation, I'd like to tie some comments to that performance, the charge, and the overall profitability of the two projects that we have now that we are now about to conclude. That is, Fulmar is still working on its project. This goes back to the guidance that we gave a little bit over a year ago of an EBITDA backlog of $18 million. I think what one should understand here when Sveinung talks about, about the $2 million charge in the third quarter-...
That is because we were tracking higher than the $18 million. Going into the latter part of the 2D project, we were booking revenues and tracking well above, about 10% above our $18 million. As these unforeseen events then came up in the tail end of the project, we need to walk back the tracking that we had on the project. That means that the charge of about $2 million is from a higher level than the $18 million guided.
To put the numbers- to put a number on it, the combined two projects, then barring any unforeseen events on the Fulmar Explorer that needs to conclude this project, but the two projects will deliver an EBITDA about 3% or so below the guided $18 million. If you look at the split between them, around half of that is due to the mechanical issue with the Fulmar Explorer that took us down one week in the fourth quarter, that we talked about in the fourth quarter presentation. About half of that is, is, is that, and the remainder is the Eagle project.
I'd like to, to commend the, the team for a very strong performance, in particular on the 2D project, when when these incidents occurred, meaning the company being able to largely deliver on, on, on the guidance. Going forward, just this point on focus on cash flow. Yes, we, that is a strong focus for the company. Still, the, the charge is then a non-cash charge. If you look at the third quarter numbers, the impact, the negative impact there will be, if, if you look at the third quarter cash flow, numbers for the company, the negative impact there will come from the, the classing of the Eagle in September that we have guided for.
Remember that the Eagle is working, and with good performance in July and August, and the Fulmar Explorer is going back to back into a new contract, which is higher paid. Overall, the cash flow for the third quarter will be good. Then we go into the fourth quarter, and then, of course, we're dependent on what is still outstanding is an Eagle contract. What we see in the market now, and provided that Eagle, we are able to, to fit Eagle into one of those leads, I think we can already now say that from the fourth quarter onwards, we should see a step up in the cash flow generated by the company.
Yeah, and that's, I guess that's a comment on attractive contracts as well. We see several opportunities, and I think we have, we have, we can safely say that we have one, at least one of those contracts with the two-year work for the Fulmar, which is unusual length in our industry, and and is sort of evidence of the strong operational performance that we're talking about. Actively monitor value creative opportunities. We are, we have talked about, vessel transactions now taking place, at... Just a reality check on, on our own, own pricing means that there is no doubt in our mind that rather than participating or with, with, with our own equity price where it is, we simply can't participate.
We will have much better use and much better return for our shareholders by spending our cash buying our own much lower priced vessels. That doesn't mean we, we are not seeking to, to do business. We are just in in in a different way, and we're hopeful we will get there. Taking some time, though. Yeah, I guess the capital distribution we have talked about. It is dependent, of course. We need to we need to release the working the the the revenue receivables. That will gradually happen over the next few months. Of course, it's, it's, as usual, dependent on normal performances on on on the vessels.
The past the past few quarters or the past many quarters at least give some evidence that that we have been able to do that so far. With that, we feel that and we're very pleased to report back to our shareholders. We have, we have said that we have a sound platform in place for some time. We have said that we are the lowest cost provider in the industry and that we will be able to provide good margins and cash flow provided that the market came back enabling us to find work for our for our high-class vessels. That is the situation that we now in, and we just repeat that.
as evidenced by these numbers and by what we plan going forward to serve our shareholders, we think indeed we have a sound platform for profitability, for capital distribution, for further consolidation in place. On the latter point, I won't comment anything further than what I've done before, but those comments still stand. We believe the industry will benefit from further further consolidation. With that, I hand it back to you, Sveinung, for for the Q&A.
Thank you, Ståle. Quite a few questions, if the audience wants to add more question, just type it into the, the Q&A part of the console. Okay, first question goes to you, Finn Atle. It's regarding the Eagle. When should we expect the SPS, or the special purpose service, for, for the periodic, sorry, service for the vessel to be finished? What do you see the, the vessel doing afterwards? Is it 2D contracts or OBN contracts? Also there is quite a few, a few question about what kind of opportunities do we see? Is it one-year opportunities or more, or, or was the two-year contract we recently signed on through Fulmar a, a special opportunity type of situation?
Yes, a lot of question packed into one there, Sveinung. The Eagle Explorer and duration of the dry docking is about three weeks. We expect the dry docking commence around the 20th of September. i.e., all depending on the final date of completion of the current project, where things stands now, this is most likely, and then thee weeks following from the 20th of September, so early October sometime. Following work for the Eagle, we have discussions with clients for a longer-term source projects, and we have 2D leads that are also in advanced discussion. I think first come, first served. Both seems to be potential opportunities just now, and I'm.
without sort of putting too much information out there, I think we, we, we are confident that we will secure work for the Eagle in, in the near future.
Thank you. And maybe do you have more, a bit more, flavor on the duration of the opportunities, or do, do you want to leave it with this?
Source opportunities have longer durations. We're talking, some of them are 1-2-year opportunities, others are sort of typical over the answer duration, which is typically 3-4 months. We will see both 2D opportunities. They are more related to particular surveys, and they have a tendency to be around four months, 90 days of operations, plus some standby. All in all, maybe 4-5 months of duration, all in all, all in all. These are more complex projects, more involved, a lot of operational issues that need to be cleared. The total duration of 2D, one thing is the acquisition period as such, but there's always periods of mobilization and getting the survey on the road.
Okay, thank you. Ståle, here is a question for you. In the beginning, you talked, talked about several transaction in the market, that has been done for a similar vessel as, as we have. The question is really, are these comparable vessels to SeaBird, and what price range are you referring to? I guess that also ties up to the question about, why do you think your share price is not reflecting the vessel transactions, really? Maybe for these two question, you can shoot at it.
Yeah. Okay, there has been some transactions done. That's right. Second, I would say from this spring, it started to become a quite lively market if you look at comparative, comparable vessels. I just need to add a little bit there. One transaction has been done, we think is has been done for strategic reasons, is out of the industry. We are a bit puzzled about the transaction done because we think we could have given the owner an even better return. That's, that, that's a different issue.
What, what we are learning now, and the latest, the, the pure sort of S&P transactions that are taking place now, these are not confirmed transactions, but these are vessels that we have been closely involved with, in order to execute on our flex strategy. We have been told that the vessels are no longer available to us, and we have also an understanding of, of the price tag. I think until these transactions have been concluded, it's not our job to, to, to bring out the numbers there, but I think what's important here, the essence here, is that these price sets are so far away from what our own vessels implicit their price to the market, that is just not possible for us to, to compete.
Our strategy, of course, is to charter in, but even if you convert it to a, a, a bareboat charter, it is just not possible to, to compete. Then we need to, we, we, we, we are thinking about generating as much value as we can for our shareholders, then that is just a data point that convinces us that, buying back our shares, or dividending out our cash and at today's prices, buying back our shares is, is the most value accretive to, to, to our shareholders.
Good. Then, there is a couple of question on the financials around it. First of all, about Loss carried forward. SeaBird has a substantial Loss carried forward in the Norwegian entities and some of the, some of the international entities as well. We do not foresee that we, we are getting into a tax position anytime soon. That said, we are also optimizing our tax strategy here. These are, like, two, two points of the same question, is that we are optimizing how the taxes are done, and we have Loss carried forward. Should not expect any tax cost anytime soon.
There was a question about the $2 million we, we talked about that will come in in Q3, and the question is, this is related to Q2 activity, why is it not booked in Q2? The reason is that we haven't fully completed the project, we need to finalize the financials for the project, we are in a position to book, book the cost. We are doing that now and will be recorded in, in Q3. Maybe a question on the, the distribution again, I, I pass this on to you, Ståle. There is a couple of question about what kind of risks are associated with that and the potential size of the distribution.
Right. On the latter, the size of the distribution, I think we... or I said in the initial remarks that we're looking at sizable distributions relative to our market value. The exact size of it, I think is a little bit too early to say. This is simply just to do with uncertainty about- uncertainties about the exact dates for, for releasing the revenue receivables and and also new contract for Eagle, you know, when that starts, et, et cetera. The exact size on it, we will get back to.
The specifics there in terms of how this will happen, any split between buybacks or dividends and the exact size, we will release more information in due time, when we have the exact visibility on that. The risks to the dividend, I sort of can't see much, actually, other than, you know, the normal, or what I just talked about, timing of the revenue receivables and also the normal issues around operational performance.
Of course, that will impact the, the, the size of the dividend, but, other than that, it looks, yeah, it looks, pretty clear from, from the the cash flow that we have, that we have already, the cash we have already earned and, and the long-term cash flow that we have, coming in. It's, should be, yeah, should, I don't think there is that much risk to it.
Okay. A couple of questions about the net interest-bearing debt slide I showed earlier. Just to be clear, that the equipment financing facility, which we included at net interest-bearing debt as of Q2, that was included on the balance sheet from the end of 2021. As the slide laid out, this was included under other payables, but has been restated now as the agreement was finalized as an interest-bearing facility. For illustrative purposes, I have restated the net interest-bearing debt slide, so to reflect this equipment financing back to the end of 2021.
That's the discrepancy of which there was a couple of questions with that, the QA, Q1, and that was $12.5, and if you add this, it becomes $15, as shown in the graph. I think we already covered what this facility includes, and just to repeat, it's equipment which was bought in relates when we did the upgrade on Fulmar in 2021 and 2022. There was a couple of question about our book values for the vessels. The question is, within oil service, vessel values have typically increased 50%-100% last year. Will SeaBird consider to write up its vessel values? This is always a discussion with our auditors and everything.
We had a good impairment test during the latest annual report. There was no question about the values on our balance sheet, and of course, this is a discussion going forward. We see that our market price for the vessels are far higher, but as of now, we are depreciating it as we have done going forward. Always something which will come as up as a discussion. I think there is a couple of questions about consolidation. You touched upon it, Ståle, but maybe do you want to elaborate a bit more on, on the consolidation topic?
Yeah, well, I can say we are, we've said this over a few quarters. Certainly, things have happened. As most people know, there was a bid for the whole company a little bit over a year ago, that that failed for reasons outside of the buyers and, and the sellers' control. Yeah, things are- have happened, and are certainly happening there. I also talked about the vessel transactions, which is, which is a part of this. We are, we are here, we are, we are open for business.
We are in all these, the type of discussions we are having, the, the, the, the interest of our shareholders in mind, and that means that we that we are quite restrictive in terms of how, how, how a deal would be done, and both, I would say, structurally and, and of course, in terms of values. It's... So it's, it's, it's not straightforward. I think but the way I think I'd, I'd like to conclude on it is that, we think the market would do well to be further consolidated. We think there are large synergies to be taken out from such consolidation. We are the only listed player in this industry, and we think we are the best platform to consolidate from.
We'll do our best to do value-accretive transactions on that note.
Thank you. One small question on the debt facility we recently refinanced. The facility is expiring in 2026. It bears a quarterly repayment profile of $700,000 per quarter. Finn Atle, there is a question, I don't know if, we don't have disclosed this earlier, and probably not going to do it now, but can you elaborate a bit of the contract value for the 2-year contract we recently announced on Fulmar Explorer?
For various reasons, I'm not able to sort of give exact numbers, but what I can say, it's in, within the range of what we've guided earlier in terms of our expected rate levels going forward. Now with the general inflation and cost increases, we've had some increased, marginally increased, operational costs. I, I think I'll just leave it at that, and then I think, you know, you can deduct on yourselves what the, what the margins are.
Thank you. Maybe the last question for the day here, and it goes to you, Ståle. We have talked about the flex charter opportunities for quite some time now. Is there any material changes, and what is the probability to achieve such an added business?
Right. Yep. We have spoken about a little bit about it already, so just me let- just let me sum up. There has been some puzzling, a couple of puzzling transactions, where we think that we think have been value destructive for its owners, previously, a few months back. That has reduced the number of available candidates. Then there has been a quite considerable tightening of the market in terms of additional interest on candidates that we have been engaged with to conclude business. That has happened just recently, and I think there will be the, the values here will be clear to everybody, probably before long. Of course, that also takes out available candidates.
To conclude here, the number of available candidates, which you can also see from the slide, by the way, that Finn Atle showed on the supply side, and the quite dramatic reduction, we're talking about more than 60%, actually now almost 70% only in a few years, reduced reduction in available vessels in this segment. Because, of course, because of that, the tighter market, it means that it is less available candidates. We're still looking and hoping to conclude, but there are less available candidates, and the pricing is stiffer. That means we need to do, we do need to do more work and get our clients with us on the other side, to conclude business that is attractive to us.
If not, we won't do it. It needs to be meaningfully accretive before we go ahead with it. Let me just comment one other thing, a sharply tightening market is, of course, if you're, if you're looking for vessels or want to add vessels, that's not good news. In terms of, of the number of vessels, it makes it a little bit harder for us. Don't forget that there is another side of this equation, and that is the pricing of our existing vessels. For those who have been following us for some time, you will remember our slide showing the illustrative EBITDA. I can say that we are now concluding business on, on our, on our, our wholly owned capacity.
That takes the company EBITDA up to, up to a level where we, where we were hoping to be, including one flex chartered capacity. There's two sides of this equation, and of course, we're very pleased to see a tightening market and better profitability on the capacity that we have. We just need to work to say, a little bit outside of the beaten path, a little bit smarter, and be a little bit more creative to try to conclude business than on flex capacity.
Good. There, there was two more question coming in here at the end. I just throw them out as well, and then we will conclude the call. First, what was the reason that you put your Q2, 2 report forward? That goes for you, Ståle.
The reason we put the Q2 report forward is simply that we saw that we had the numbers ready, and also there were actually just some practical practical internal things for us that made it that made it more convenient to do it this week than the next week. Nothing, nothing over and above that, but having the information at hand and we, we, and in particular, the information that that is easy to see that the company is is starting to amass a certain amount of cash. We felt there was no, no reason to be to be delaying the report.
Yeah, the last one for you, Finn Atle . How many players are competing in the vessel market for 2D and source?
Good question. Your source vessel providers, there are three. In the 3D market, well, it's difficult to answer really, because any 3D vessel is also a potential 2D vessel, and I guess also they are also potential source vessels. It's all sort of, interlinked in, in, in, in, in that regard. Obviously, if you have a 3D vessel fully equipped for, for 3D streamer operations, you don't want to go down to 2D lower source work because it wouldn't render any good economics with all that asset on board. Pure 2D players, hmm, I, I don't know, maybe... I mean, there are some 2D players in Russia, but currently they're not operating in the international market. When they are, when they are out of the equation, I would say maybe two or three players in the, in the 2D market.
Obviously, the 3D operators are sort of time to time providing 2D work as a part of a 3D scope. There might be portions that are done as 2D work. Pure 2D work is becoming rarely for the 3D operators and will become more rare in the future, I believe.
Okay, thank you. This concludes the second quarter and half year report and presentation for SeaBird Exploration. Thank you all for your time.