Good morning, and welcome to SeaBird Exploration Q3 presentation. My name is Finn Atle Hamre, CEO, and I have with me today our Executive Chairman, Ståle Rodahl, and our CFO, Sveinung Alvestad. Before we begin, please note the Q&A functionality in this webcast, where you can post your questions, and we will revert to these towards the end of the presentation. SeaBird Exploration in brief. SeaBird Exploration provides marine seismic acquisition with a current fleet of two 100% owned vessels: the Eagle Explorer and Fulmar Explorer. The Eagle Explorer is currently equipped to perform both 2D streamer acquisition and source services. Currently, the vessel is in Singapore, mobilizing for a 2D project in Asia. The Fulmar Explorer is equipped for seismic source services and currently engaged in two-year contract for projects in the Gulf of Mexico.
In addition, we have seismic equipment to rig chartered vessels, which again enable SeaBird to relatively quickly increase its fleet by up to two additional vessels. Next, please. Third quarter key events. High utilization, which, for practical purposes, is 100%. Eagle Explorer completed source project early October and started dry docking and a five-yearly special periodic service directly after that. Fulmar Explorer started a two-year contract in the Gulf of Mexico in September and continues to, with steady production. Operational EBITDA for the quarter was $4.2 million. Positive cash flow, resulting in a cash position of $4.1 million at quarter end. We keep a continued strong focus on working capital release. Contract coverage and backlog. We continue operations on our backlog for both Fulmar and Eagle.
Eagle Explorer is currently on paid mobilization for next project, and we expect Eagle to start production on this 2D contract in late November and remain in production until end of February. Fulmar Explorer continues a two-year contract in the Gulf of Mexico. Outlook. Delivering on the backlog, coupled with leads for both 2D and source work. We are entertaining discussions for flexible charters, which will tie into leads we are working on. Utilization. This graph gives you some flavor on historical utilization, which can be directly correlated with the market development in the same period. Third quarter and last Q3 , utilization was, for all practical purposes, 100%. In Q4 this year, we will have a small dip due to recent dry docking of the Eagle Explorer. Market development. In short, market trends and indicators remain strong.
Here we can see the market recovery after COVID and development since. If we couple this with the fleet reductions, partly permanent reduction, it further indicates a tight market going forward, especially for newer vessels, typically built after 2003. However, as more and more OBN baseline surveys are done, we believe the volume of projects in this market will remain strong and even increase in the years to come. Market trends. Here, represented by our leads received at our end. Leads received are tapering off somewhat after Q1 , and we see some of the node operators have secured base source capacity for the year and projects. And in some cases, they have secured vessels for one-year contracts. We, we expect the leads to increase towards the fourth and Q1 , which is typically being the peak period of the year we're receiving leads.
The mix between 2D and source seems to be more or less the same as before. Source fleet overview. The overall source fleet remains more or less the same. Some vessels are taken out of the market and some taken out of a lay-up and brought back to the market, but sort of the overall fleet seems to be more or less stabilizing. Some of the vessels are also capable of 3D streamer work, and the search in a strong towed streamer market can return to this market. Volume of OBN projects is slowly increasing, and more and more baseline surveys are done, which again, will strengthen this market forward. It's interesting to couple the previous two slides with the available source fleet development, which indicates to us a strong and remaining market going forward.
I will hand it over to our CFO, Sveinung Alvestad.
Thank you, Finn Atle. Now, turning to the financials. Revenue for the Q3 was $6.5 million, up from $2.8 million the prior quarter. The revenues, as we disclosed in the Q2 report, was negatively impacted by a $2.1 million reversal from the project we completed in India during the summer. Hence, operational revenue for the quarter was $8.7 million. Revenues for the first nine months of 2023 was $26.1 million, up substantially from $11.2 million the same period in 2022. Reported EBITDA for the quarter was $2.0 million, or $4.2 million when adjusting for the reversal just mentioned. Up substantially from a -$0.6 million the same period in 2022.
For the first nine months, it was $11.0 million, compared to -$1.7 million the previous year period. Q3 net profit was $500,000, up from -$2.5 million the same period in 2022. Net profit for the first nine months of $9.5 million is positively impacted by a $5 million non-cash gain related to the distribution of the shares in Green Minerals during Q1 . The comparable figure for 2022 was a loss of $9 million. Cash flow from operation was solid at $3.4 million, while net cash flow after CapEx and financing activity was $1.9 million. Net interest-bearing debt as of end quarter was $12.6 million, and the equity ratio increased to 58%. Now, looking forward.
Based on the operational optimization and favorable currency development, we now see annualized G&A in the range of $3.5 million-$4.0 million, with quarterly fluctuation. For reference, the SG&A for the first nine months was $2.5 million, and the last 12 months it has been $3.6 million. We expect the strong financial performance to continue, and we are actively working to convert our working capital position to cash continuously. Based on the current backlog and the strong outlook for the industry, we expect that the board of directors will be able to announce the first dividend in conjunction with the Q4 report in February next year. Revenues in the quarter was, as described, impacted by the $2.1 million revenue reversal.
This resulted in reported revenues of $6.5 million, while the operational revenues for the quarter was $8.7 million, slightly down from the previous quarters. The revenues for the trailing twelve months continued to increase, and it is, as of Q3, at $35.1 million. This is a level SeaBird hasn't seen since 2020, when the company operated seven vessels. More importantly, the profitability remains solid as well. Q2 operational EBITDA was $4.2 million, or $2 million if including the one-off mentioned earlier. The rolling twelve months EBITDA continued to increase to $13.4 million, substantially up from the prior quarter, and is now at a level not seen since the downturn hit the oil and gas industry back in 2016.
That said, we continue to see upside to the 12-month, 12 months EBITDA as we are executing on our solid backlog and the market fundamentals remains solid. SG&A for the quarter was $0.7 million and $3.6 million on a trailing 12-month basis. As said, we now see SG&A in the range of $3.4-$3.9, $3.5-$4.0 million on an annual basis. Now to the cash flow. As you can see from the chart, SeaBird started the quarter with a cash balance of $2.2 million. Operating cash flow for the quarter was solid at $3.4 million, where working capital contributed positive with $1.1 million. We continue to have a strong focus on the working capital situation and are actively working to convert our position to cash.
We do, however, expect some tie-up in capital in new contract commencement during the quarter, but this is somewhat offset by improving payment terms. Capital expenditures was just south of $500,000 in Q3, which is a mix of normal maintenance and preparation for the dry docking of Eagle that was performed in October. Furthermore, we repaid around $400,000 of debt during the quarter and paid around $550,000 of interest. Quarterly debt service cost is expected to be around $1.2 million going forward. All of this leaves us with a net cash flow for the quarter of $1.9 million and a cash balance of $4.1 million. Net interest-bearing debt at the end of third quarter was $12.6 million, where the gross debt stands at $16.7 million.
The debt comprises of $14.2 million of bank financing and $2.5 million in interest-bearing equipment financing. We have, since the start of 2022, reduced our net interest-bearing debt by $11.4 million around 15%. As previously announced, the refinancing of our bank facilities were finalized in July and is now comprising one facility of $14.2 million and one guarantee facility. The maturity of these are in mid-2026, and the loan has a quarterly installment of about $700,000. With that, I leave the word to Ståle. Stale, here we go.
Yep, thank you. Good morning, everyone. So what does the slides that Finn Atle and Sveinung just presented mean for our shareholders? We put together this slide for the Pareto Conference earlier this fall to illustrate the EBITDA and dividend potential for the company. I want to emphasize that this is for illustration purposes, it is not guidance for the company. And therefore we have chosen to call the vessels by their segment rather than by their actual name. The overview here shows that a 2D vessel, back at the last peak in 2013, would earn around $25 million on an annual basis, and a source vessel around $20 million.
The downturn has been long and deep and, but we're now back to a market where 2D pays around $15-$22. There could actually be some upside on that number, but that depends on, the contract, the structure of the contract and, and also the performance of the vessel, doing it. In source, we believe 12-16 is an achievable number, and, if you put this together then and, assume, a healthy 95% utilization and smooth operations, and subtract, as Sveinung has just guided, the $3.5 million-$4 million in SG&A, debt service of around $4.5 million, this include, amortization, of course. This is the total cash spend on our debt.
A conservatively calculated CapEx, I'd say, of $1.2-$1.5 million, you end up with free cash flow to equity, which is our main focus, as we guided. Going forward, around $17-$28 million. This leaves us with a free cash flow to equity of 2.3 NOK per share in the lower end of this range. So while emphasizing that, this is on the basis of 95% utilization, basically 100% contracts and throughout the year, and smooth operations, we have not included any EBITDA from flex capacity on this. So that's worthwhile noting. And if we go to the next slide, then.
We've included a separate slide on distribution to shareholders this time, in order to give you some details about recent history and a little bit of things that's been going on under the hood, so to speak, in terms of setting the company up for dividend payments. Importantly here, of course, the new bank debt or the refinancing that we did in June setting us up with bank debt, with maturity in June 2026, is important here. In addition, we have serviced our capital. We have serviced our liabilities with around $18 million over the last 15-18 months.
Some of this on the working capital side, of course, is on the asset side of the balance sheet, but still, I think it's worthwhile noting and a useful number to have in mind, that this company has improved its financial position. It has improved its balance sheet with around $18 million over this period. We have secured a base utilization for the company with what I would probably call an industry-leading contract for the Fulmar Explorer. It's two years at strong day rates until September 2025. And this, of course, is an important element in giving us visibility on cash flow and with the aim to start distributing cash to shareholders. And finally, we have completed the five-year special survey for the Eagle Explorer after quarter end.
This is on time, on budget, and also means that the company has less need for contingencies in this regard. So these are all important elements in setting the company up for dividends then. But still, of course, we need and the prerequisite for the dividends, needless to say, is continued strong operational performance for both the Fulmar and the Eagle. The money needs to be earned. And we've had, I'm very pleased to say, a strong track record in this regard over several contracts and several months up to this point. The timing of the dividend, as we touched upon, Q4 release, we see as a natural time in this regard.
Also, I want to emphasize that the board of directors in SeaBird Exploration aims to distribute any excess cash in the company over and above what we need to maintain a sound financial position. Next, please. So in summary, our strategy is centered around strong operational performance. And I'd like to thank the entire Team SeaBird for great efforts, great work. And not least with Finn Atle heading this up. We have achieved, we have improved our backlog length substantially. And also importantly, the quality of backlog, that backlog, is up and it's continuing to improve.
We are now focusing on converting this, converting our working capital and converting our contracts to cash, and we have our eyes keenly fixed on Free Cash Flow to Equity as a central parameter. We are actively monitoring value accretive opportunities. We are approaching this in a conservative manner. And I would say that what I just said about the balance sheet and the balance sheet strength of the company increases our maneuverability somewhat. But we have a conservative approach, and we will only act to the extent that we see that we can add shareholder value as measured as shareholder value per share through any deals that we made it.
So based on our backlog quality, based on the debt refinancing, and based on release of working capital, the company is set up for the next phase, capital distribution. We will distribute capital through dividends and/or share buybacks. We have a general preference towards dividends, simply because this board of directors sees dividends as the easiest and the best way to make sure that all shareholders are treated equally. And we expect to announce our first dividend, as we've said, amidst the Q4 report. So, with this, I hope we managed to get across to you that the work we've done over time now in SeaBird has created a sound platform for strong profitability and consolidation. And with that, I hand it back to you, Sveinung, for the Q&A.
Thank you, Ståle. Okay, just to remember, remind people, there is a Q&A box in the audio cast solution here. So please, if you have any question, enter them there, and I will address them, now. So first, question, is, for Finn Atle and Ståle, and it is, "How is the outlook for flexible contracts?" And then I guess, it's, with the vessel side the, the question is, addressing.
Well, you need to do, I guess, couple this with the presentation we just gave and the market outlook. There are indeed discussions ongoing. When this will come to fruition and if, it's really difficult to say. But, we're working in parallel with boat owners and clients, and it remains a strong focus on our side that it needs to be tied together. So we don't want to be ended up in an exposure for vessels without tying it down to a contract on the other end. So it's a bit of juggling there to get these things to line up.
Good. And then I think it's, and the topic is, basically the same, so I can give this to Ståle. Maybe you can give a bit more flavor to consolidation you have spoken about in the previous presentations and, of course, touched upon now as well.
Yeah, sure. So, we haven't included any slides on this in this presentation. I think that would be a sort of overreach. But back to the Pareto Seminar earlier this fall, we included two slides on our market, which I think those who are interested, they should take a good look at. And just to sum that up, there are two things to, I think, pay attention to here. One is the seismic industry at large, which is an industry that has been created very much the structure of the industry that you see today have been created through M&A. So this is an industry that has a long-standing history of M&A.
The consolidation of new players that have, you know, come up in this market over the last many years has now come far. So there are not many players left as most of you know. So I think that's just an interesting backdrop, smaller players being consolidated into larger players. I think furthermore, what we've seen just over the last year, which adds to this, is that we've started to see consolidation that is not only horizontal but also vertical in nature. And I think that's something to also pay attention to for investors. So what does that mean for our segments then? 2D is, I mean, it's nothing to speak of.
It's a very small segment that we don't have many players actually offering there. So but to look at OBN, you will see that there are very few players left in the OBN market. Some consolidation has been happening vertically lately, where there is a need for our clients, it seems, to secure capacity. And the players left then as independent suppliers of OBN services are not many. You can count them on one hand. It is Sanko, it is SeaBird, it is Westland, it is Maritime Management, and there is one more smaller players. Now, the only players that are having two vessels or more is actually Sanko and ourselves.
So, we'll see what happens going forward, but it's a very small supply side. And I would like to add that I think all the players currently offering OBN services are too small in order to. If you look at this from the point of view of optimizing efficiency for these companies. So, we'll see what happens going forward. We have said that we are keen to see more consolidation. We are keen to create a stronger player. We have, I think by far the best platform to do that from, and without going into details of what all those elements are.
Thank you for this, Ståle. I have a question for you, Finn Atle. It's would it and this is really the end game is. Yeah, let me just re-read it out. "Would it be better to secure a long-term OBN contract for Eagle so that we can get stable dividends going forward?
That is certainly something we, we consider. Currently, the 2D project, the 2D projects have been lining up pretty nicely between each other, so we haven't had any timing between or significant time between without having paid mob or demob, so it hasn't really had any effect to that relation. But certainly if we see a dip in the 2D market, and also we are always discussing these things with our clients, so if that's a possibility, well, it's certainly something we will look at, and it could make sense. You know, certainly you see the Fulmar going on a two-year contract gives stable income and visibility.
Thank you. Then a question from me. "Are we looking into writing up the values of our vessels?" So we are not writing up values on the vessels, but going into the audit period for next year and impairment testing, I think with the market improving as we have seen during the year, I think defending our balance sheet would not be an issue with this year's audit. Obviously, we are going to collect the broker reports and do our thorough impairment testing on this, but we are quite comfortable confident going into that process this year as well. Yeah, so I think this sums up all the questions.
There was a lot of questions, specific questions on consolidation and so on, but, as Ståle has gone through and answered these, I guess we can't be more specific on anything, but, for obvious reasons. With that, I think if any of my colleagues want to do some closing remarks, I think we will end this call. With that, I just will thank everybody for the time, and see you next time. Thank you.
Yeah. Thanks for your attention. Thank you.