Transportadora de Gas del Sur SA (TGS) 2024 Q4 法說會逐字稿

Welcome to our TGS Q4 2024 presentation. My name is Bard Stenberg, Vice President of Investor relations in TGS.

Today's presentation will be given by CEO Kristian Johansen and CFO Sven Borre Larsson.

(operator Instructions).

So with that, I give the word to you Kristian.

Thank you, Bard and welcome to the presentations. So, before I start on the first slide, so that TGS PGS merger completed on July 1 last year. So, all financial numbers in this presentation are based on pro forma numbers unless stated otherwise.

Financial numbers are also based on POC or percentage of completion for ongoing multi-client projects unless otherwise stated.

So, with that, I'm going to hit the highlights of Q4. So, we have total revenues of $492 million in the quarter. That's up by about 19% from $414 million in Q4 2023.

Our EBITDA for the quarter was 267, and that compares to 243 in Q4 of 2023.

We had an EBIT of $92 million that compares to $47 million in Q4 of 2023, so pretty much a doubling of our EBIT and an EBIT margin of about 19%.

We also successfully completed a balance sheet refinancing of the existing PGS debt at very attractive terms.

And as this is something we actually planned to do in March 2025, but the window was open in November and we decided that we could just as well go ahead and utilize or take advantage of the attractive terms that we saw in the market at the time.

And that also leads us to synergies. We have realized $100 million of merger synergies, that's significantly ahead of our plan, which was about $60 million at this time of the year, and that is obviously partly due to the balance sheet refinancing that we did a few months early compared to our initial plans.

Last but not least, I'm happy to say that the board of directors have approved an increased dividend of 11% compared to 2024.

So, 2024 has clearly been a transform transformational year for TGS and I think this slide kind of summarizes some of the some of the key head headlines of that. So number one, we completed the PGS acquisition that I talked about.

As I said, the transaction closed on July 1, and since then we have successfully and very swiftly integrated TGS and PGS organizations. So, we Started with a people process that we finished in September and October. We got all the people globally moved into the same offices in all the major hubs by late October or early November and again as I said, the synergy targets are ahead of our initial plan.

It's also important when you do something like that because it takes a lot of focus on the organizations. So, really keeping the eye on the ball has been very important for management and I'm proud to say that both Q3 and Q4 came in pretty much at or slightly above our own expectations. So, that means that the year on year EBIT increased by 23% in 24 compared to 23%.

We had multi-client sales to investments of 2.2% and for those of you who follow TGS closely that the average in our history is somewhere around 1.9, so 2024 was a very good year for multi-clients and we're very pleased about a sales to investment of 2.2%. And then last but not least, we had contract revenues with the growth of showing a growth of 12% in 2024 versus the previous year.

I talked about the refinancing, so again, we have refinanced all the legacy PGS debt at attractive terms, and we have realized about $35 million of financial synergies or interest rate synergies, which also is slightly better than what we expected or planned for.

We clearly have a unique business model, we're the only integrated or fully integrated energy data company, and we have leading positions in all segments, whether you talk about streamer, seismic or streamer acquisition, ocean bottom node acquisition, multi-client business, of course, where we represent about 62% of the global investments in multi-clients since 2018.

On top of that, we have a fast growing new energy business, which we are very proud of the results, which I will come back to, and we have an imaging business that is also growing fast.

So last but not least, increasing shareholder value, we're positioned to improve cash flow, which is obviously our key target and our key rationale for the acquisition of PGS and we're showing confidence today by increasing the dividends by 11% versus last year.

I'll give you a brief business update from the quarter. So, this shows the data acquisition activity in Q4 of 2024, and I think more importantly it shows the great diversification of our business that we have now compared to if you go back and look at 2023 and even before that.

So, if you look at the dots on the map and what they illustrate this OBN operations, new energy operations, multi-client OBN onshore projects, multi-client vessel operations, and contract vessel operations.

So, I'm obviously not going to go through every single activity that we had in Q4, but, there's a few highlights here. Number one, I think it's the first time in my 15 year history with TGS where we see a survey outside California, and that has some obvious reasons.

There hasn't been a lot of oil and gas activity there, but it's obviously related to our new energy business. So we're in California. We have a few onshore projects in the US onshore in the lower 48. We have 3 projects in the Gulf of America. We have 2 projects in Brazil and one in Argentina. We're active along the west coast of Africa with Namibia, Angola, and Nigeria.

We have new energy projects in Ireland and Northern Europe. We have a project in Egypt, we have one in Malaysia, and that kind of summarizes a very busy quarter in terms of acquisition activity of data, whether it's related to oil and gas or offshore wind or even TGS.

Brief update on our multi-client performance in the quarter. So, it was a strong quarter for multi-client. We had multi-client sales of $259 million and on the pro forma basis, the two companies had $231 million in Q4 of 2023.

We generated those revenues of $259 based on investments of $100 million and as you see last year we had $106 million. And again, as I said initially, we had a sales to investment of 2.2 for the full year. But if you do the math, you see that the sales to investment for the quarter was actually 2.6%, so significantly above the historical average.

And then you see in 2023, we had 1.6% in sales to investment. So solid multi-client performance, it's driven by a seasonal Q4 uptick that we are quite used to see in our industry and strong pre pre-commitments for ongoing surveys, which obviously means that the risk we're taking on these new projects are very low.

We invested about $427 million pro forma for the full year, and I'm just highlighting two projects that we were actively acquiring in Q4. So, one is the Malvinas Phase 3 Offshore Argentina. This is about 75,000 square kilometres. And when we complete that survey, we will have about 25,000 square kilometres of data in the Malvinas Basin of Argentina.

This project was not acquired with a PGS vessel. They actually use the third party vessel, and you will see from time to time that TGS will continue to use third party vessels when we either don't have capacity ourselves or when we see that economics are better at doing it this way.

Then we also have commenced an integrated multi-client project. It's a converted contract offshore Angola. This is an 8,700 square kilometres 3D survey.

And again, this is a survey that's where the pre-funder benefits from the fact that TGS already has a permit in the area. And this is an important competitive edge for TDS because having that huge multi-client data library also means that we have strong government relations, we have permits or existing permits, and we're in good positions to make sure that we do the next survey in that particular country.

Going next to a contract updates, so we had OBN contract revenues of about $132 million so a very good quarter for our OBN business. You see, we're up from $77 million in Q4 2023. And then for Streamer contract revenues, we had 131, which is only slightly up from 127 in Q4 of 23. So, we had relatively low utilization of our streamer fleet, as and as we set up the Q3 presentation.

And, part of the reason for that is some of these yard stays that you need to do from time to time.

EBITDA margin of 25% versus 29 last year, we had a normalized OBN crew utilization of about 3.5 out of 4 available crews in the quarter, and you see that significantly up from the 1.9 that we had in Q4 last year.

Active vessel times 66% versus 56% in the same quarter of last year.

We're also, we have announced a couple of projects here. We have an OBN contract award in Europe, and then we have a 3D streamer contract award offshore India. And talking about Europe, as we get closer to the summer season, you will see quite a few new contracts being announced over the next few months in terms of filling up the, both the vessel schedule and the OBN crew schedule for work related to Europe.

Next one is new energy solutions, contract revenues of $7 million versus 3 in Q4 of 2023. And then you see the multi-client revenues are significantly down, and the reason for that is that we had low data acquisition activity.

So, this is going to be, this number is going to vary quite a bit between the different quarters, depending on whether we have new activity related to acquisition of data.

But the good thing about our new energy solutions business is that we have these acquired companies 4C and Predictor, they're both doing well and we have a good base of revenues that is quite stable and it's growing, and then obviously you're going to have a bit of volatility in terms of the timing of some of these acquisition projects that are more kind of seismic related and subsurface related and mainly targeted at offshore wind and CCS.

Talking about offshore wind, we successfully completed a UHR which stands for Ultra high resolution 3D survey in the Irish Sea, and then we have been awarded two offshore wind, site characterization contracts for the 2025 summer season.

And typically, you would see that when we have this site characterization contracts, that would involve the use of a more traditional Seismic Vessels and you would see that revenues would go up in that particular quarter.

And then imaging and technology. So, if you look at the financials first, we had gross imaging revenues, which obviously includes imaging and processing done for third party and for TGS, and you see the mix there is about Fifty-fifty.

So, we have external imaging revenues of about 15, that, that's up from 13 in the same quarter of last year. And then we have an EBITDA margin of 20%, which is significantly above what we had in Q4 2023.

That is pretty close to the target margin that we have for the long-term so I wouldn't expect every quarter to be 20%. It's very good for Q4. Very pleased about that, but it's kind of, where the long long-term target sits in terms of where we want to be over time.

So again, it may vary a bit over the next few quarters, but our goal is that we're going to be profitable in imaging and our long-term target is to be around 20% on the EBITDA.

The picture there is from what we call a Gemini enhanced frequency source technology and the reason why we show the picture is that we recently won Exxon Mobil supplier innovation Award for 2024.

So, in competition with pretty much all the vendors to Exxon, we won that prize and it shows that TGS is definitely in the forefront of acquisition technology. Compared to pretty much any seismic company, but also other all service companies. So it's a, it's an award that we feel extremely pleased about.

We've also launched an advanced imaging centre for Petrobras in Brazil, and this centre is dedicated to OBN and 4D imaging, and it means that TGS has their own people in Petrobras's office and helping them doing a lot of the 4D and OBN imaging, working very closely in teams together with Petrobras people.

So again, I talked about the merger synergies that are ahead of the plans that we had an initial target of about $60 million for 2024. And again, we have realized a run rate by the end of the year. It doesn't mean that the cost is that much lower by the end of the year, but it means that we're down to the run rate that we're going to see continuing to go into 25 and 26, and that run rate is about $100 million lower than the comparable number for 2023.

We completed the reorganization, as I said, we did that in Q3, we completed the refinancing in Q4, and again, very happy to see that everyone's now in the same office in all the major hubs.

On track to deliver the total synergies of $110million to $130 million per year in 2025 and of course, we have additional synergies from deferred tax assets that are not included in that number.

So, that's all I had for the initial part and then it's going to come and talk about the financials and then I will come back and talk about the outlook for 2025.

Thank you very much.

Thank you, Kristian. Good morning.

So, I'll start by going through some key numbers in the P&L. Christian has already talked about the different business units and some key numbers for those. So I'm not going to go into detail on the, on business unit level in my part of the presentation.

So, we had $492 million of net produced revenues in Q4 of 2024. As you can see, that is significantly better or 19% better than the same quarter of last year on a pro forma basis.

Multi-client was up 14% year over year and the contract revenues were up 26% year over year, so 19% in total, which is quite a good development that we're pretty happy with.

In terms of the net operating expenses, they came in at $225 million. This is after capitalizing $52 million of our gross cost to the balance sheet. So the gross cost was $277 million in the quarter, capitalizing 52, ending up with $225 in Q4 of 2024.

Looking at depreciation and amortization, and we had $113 million in total of amortization of our multi-client library.

Of this straight line amortization of the vintage library, which consists of the completed surveys where $60 million that tend to be quite stable from quarter to quarter.

And, accelerated amortization, which is more related to the ongoing surveys that we had, where $50 million in this quarter and then we had a small impairment charge of $3 million included in that number as well.

Depreciation was $63 million and that tend to be reasonably stable, although it has gone a little bit of, lately as you can see, and that also has a little bit to do with the, with how much of depreciation that is being capitalized to the multi-client library on ongoing multi-client service. So it may vary a little bit from quarter to quarter on a net basis.

Looking at EBIT on the bottom right hand, chart, we had $92 million of EBIT in this quarter operating profit, which, corresponds to an operating margin of 19%. So the margin is actually the same as we had in the corresponding quarter of 2023, but as the revenue is significantly higher, we have a significant improvement of the operating result, as you can see from the bar chart.

Here is the profit and loss account for, measured on a produced or POC, basis. As I mentioned, total revenues $492. We had cost of sales, $138 personnel costs $57 and other operating costs of $30 million in the quarter. This amounts to $225 million of that cost, as I pointed out on the previous slide.

Which gave us, an EBITDA of $267 million in the quarter. Straight line amortization of $60 accelerated of $50.

Impairments of 3 depreciation of 63, we ended up with this $92 million of operating profit in our produced accounts for the quarter.

The cash flow statement, we had $181 million of cash flow from operations. Here you should know that we had a significant negative contribution from the working capital development in this quarter.

In our business, as the multi-client revenues are very vacuum loaded in the quarter, and also a lot of the contract revenues are collected in the quarter after they are earned.

So you will, experience when we have a significant swings in our revenues, you will experience, quite significant swings in the working capital development as well.

Q4 was also in addition to this kind of normal effect, Q4 was also a little bit special in the terms that in Q3, the previous quarter, we collected more than usual in quarter, which means that we started the quarter with an unusually low receivable balance, and then we ended the quarter with a significant increase in in in that balance, and we expect to collect a lot of the revenues that we generated in Q4 in Q1.

So, a quite negative contribution from working capital in this quarter.

For the cash flow paid to our multi-client investments was $85 million. You can see the split between the different elements into that number outlined on the, in the table.

We had CapEx of $38 million and we received a little bit of interest, $4 million and ended up with the cash flow from investment activities negative by $120 million. And then we had net change in interest bearing debt and leasing of close to $100 million. This includes the impact from the refinancing of debt that we did in in Q4. There are some, yeah, roughly $65 million of that is related to the make whole premium.

Accrued interest on the loans that we accrued interest on the loans that we paid back in the quarter, as well as transaction costs. So, you should be aware and take note that this refinancing had a fairly significant negative impact on cash flow in this quarter.

And then we as usual, paid the dividend of $27.5 million and we ended up with cash flow from financing activities negative by $145 million which meant that we had a net cash flow negative by $84 million in the quarter.

Our balance sheet, there are, a couple of things you should note on the balance sheet. First, on restricted cash, you can see that the long-term person or non-current portion of restricted cash is now $0.

However, there is still roughly $37 million of restricted cash included in other current assets. So we still have a bit of a current balance on restricted cash that is related to the export credit facility that we still have. It was refinanced in Q4, but the settlement of that, ECF refinancing will take place, now in February.

So we expect to get rid of the, that restricted cash now in Q1, which is included in other current assets in this in this overview.

And also, as I pointed out, accounts receivable, as you can see here, it's increased quite significantly, during the quarter. If you look at our net debt balance, it's stood that $500 million at the end of the quarter, and that's an increase, from, the end of Q3. Related partially to the negative contribution obviously from working capital in the quarter and partially to the impact from the refinancing that I that I talked about earlier.

And some more details on the refinancing. You can see the, on the chart on the left hand side here, you can see the debt stack that the PDS had at AAR and 2023 that we took over basically when the transaction closed in mid 2024. And you can see what the structure of our current, how the structure of our current That stack look looks like after we have repaid the ECF now in in February.

So what we did essentially during the quarter we refinanced the $450 million dollar senior notes that that TGS had. We put in place a new bond loan of $550 million at 8.5% interest rate compared to 13.5% interest rate on the previous TGS bond loan. We also put in place or refinanced the RCF that that TGS already had in place. So we have an RCF $550 million. We have drawn $25 million of that in at the end of the quarter.

And then we're putting in place a term loan of $45 million which is used to repay.

The the export credit facility, as I mentioned.

So all in all, we have a very solid financing structure in place that gives us a lot of flexibility going forward.

And also, as I mentioned, this, that there are some, call it one of cash outflows related to the transaction. We had to pay to make whole premium on the existing PGS bond loan or the previous PGS bond loan, and we also had to pay accrued interest on these loans that we repaid. And there is, also, of course, a little bit of transaction costs in that number.

And then I'm happy to say that the board has approved an increase in the dividend of 11% as Christian already talked about, we are ahead of plan in realizing our synergies and realized $100 million of synergies. So although we, our net debt is still not down to the target range of $250million to $350 million the board felt it was prudent to increase that. The dividend and give the shareholders a little bit of the synergies that we have realized to date.

However, I think if everything goes according to plan and the way we see the future, there should be plenty of room for further dividend increases in the longer term.

By that, I hand the word back to you, Kristian, to go through the business outlook.

Thank you, Sven, and as I said, I'll give you a brief update on how we see 2025. So I'll start with some analyst estimates for 24 and 25. So you start on the left-hand side and you look at 2024 and offshore EMP spending was up about 11%, according to our sources, for 24 versus 23.

And then total spending was up 3% and due to lower spending in onshore. As TGS has less exposure to onshore. It's less than 10%, so more than 90% of our business is offshore exposed. Looking at 2025 and what the market estimates for that is 3% on offshore spending and pretty much flat on total EMP spending. So again, the growth is going to be lower than 2024.

I'm happy to say that we grew more than the market in 2024, so we had 19% revenue growth versus the offshore market that was 11%. So in that regard we're pleased with that and obviously our goal is to make sure that we continue to do that in 2025. Obviously a lot of uncertainty right now mainly related to geopolitics and.

We just got to see how things play out. I've noticed that both, Halliburton, SLB and Baker guided for a flat 2025 where Q2 is probably going to be slightly better than Q1 in terms of year on year numbers. But again, this is what we plan for in terms of overall EMP spending for 2025.

If you look into our business more specifically and you look at the 3D streamer contract tenders, and this is a graph that we showed last time we met and we had a sharp increase in active tenders towards the third quarter of 2024 and you see it come down slightly towards the end of the year and the reason for that is obviously that we have a lot of these tenders have been awarded.

So as you see, we have 4 tenders here that we won and that we have announced to the market. And what I can say is that if you look at the graph, you clearly see that we're at a much higher activity level overall, despite the fact that you've seen a little bit of a dip towards the end of the year.

So overall, we think that the contract market will be better in 25 than it was in 24, and that we expect the utilization, of course, of our fleet to be better than it was in the previous year.

In the OBN market, we've seen a significant growth since 2020 and although this spot shot starts at 2023, you saw healthy growth in the market from 23 to 24. And then when you look into 25, it seems like it's going to be flattish or perhaps slightly up.

And if you look at the third bar here, you see what has been secured in terms of work already by the industry. And then you see the kind of dotted box on the 4th box from the left, that includes the pending work, so that includes tenders that are out as we speak and that obviously we and other companies are competing for.

So, I guess the key message here is that the growth is probably going to be lower than what you've seen in previous years, but we've seen fantastic growth in this market now for ever since 2020.

We have secured, as I said, about 70% of the 2024 revenues as an industry, and if you look at TGS more specifically, we have the same number of crews that we've had in for the past two years. We have 4 crews and in order to grow that business significantly we would have to add the fifth crew.

We're not going to do that because we still don't see the profitability in our OBM business that you should see in a business that is growing at, has been growing at double digit for the past few years. This is partly due to pricing discipline. It's partly due to smaller players trying to break into this market, and I guess the key message from TGS is that we focus on profitability and not on market share, and we're not willing to take jobs at a loss.

We move on to the market outlook for TGS, more specifically for 2025, and we try to split that into the different buckets where we have business. So if you start on the left-hand side for multi-clients, we expect, as Sven said, higher multi-client investments for 2024 relative to 24, 25 relative to 24, and we expect continued high pre-funding level.

In terms of sales to investment, we obviously don't guide on that because we don't have much visibility on it, but I'm very proud of the 2.2 that we achieved in 2024, and I don't see any reason why we should set the bar lower than the two that we have on average over the past, 40 years since we've been in business.

In terms of streamer contract, we are going to benefit from improved vessel utilization in 2025. Some of the work that we announced or that we felt pretty good about at the Q3 presentation has been pushed out slightly, and this is outside our control in terms of this is related to permits, it's related to environment, our environmental permits, it's related to fisheries and you name it.

So, some of that stuff has been slightly moved out of Q1 and into Q3 or Q2 and later, but overall, we feel like utilization for the year is clearly going to be better than it was in 2024.

On the OBN contract side, we expect the 2025 with a normalized crew count in line with 2024. So again, we have four crews and we had good utilization of those crews both in 204 and 23 and again, if we can keep that same utilization, we expect some kind of a flattish OBN market for 2025.

We expect to use some of the TGS OBN capacity for multi-client projects, so something for you to be aware of. We haven't done that much in 23 and 24 because we've basically been sold out with external or third party clients. You could probably sell that in 2025 as well, but we have multi-client programs where we need that capacity and we plan to use some of that capacity for 25.

In terms of imaging, we expect the strong growth in 25. We have a very strong backlog in our processing and imaging department right now. And, again, we're benefiting then from scale and a more diverse product portfolio, and again, you will see improved profitability in imaging in 25 relative to 24.

Last but not least, the new energy solutions, we expect continued growth.

Well, it seems like there's someone trying to get hold of us.

I expect the growth in NES to continue in line with previous year, so that means that double digit is where we set the target in terms of our new energy business.

Guidance for 2025 we're guiding a multi-client investments. They're going to be somewhere between $425million to $475 million for the year, so higher than in 2024, and we expect approximately 70% of the investment to be acquired with TGS own capacity. That number may of course vary a little bit, but somewhere between 60 and 75 is probably our best estimate as we speak.

CapEx, approximately $150 million and that excludes approximately $10 million of integration-related CapEx that you will continue to see in 2025.

On the gross operating cost, we target approximately 1050, so slightly above a billion dollars in gross operating cost. This obviously includes SG&A where we have very good visibility on the cost, and we have very good visibility on. Synergy takeout's, but it also includes cost of goods sold, which will vary with the activity level. But based on the activity level we see right now and the mix of multi-client versus proprietary, this is where we see the gross operating cost for the year.

And last but not least, on the utilization, we have guided improving utilization of 3D streamer fleets, and we have, and we're repeating today that flattish OBN data acquisition activity relative to 24, both in terms of the overall industry but also in terms of TGS based on the capacity that we have right now.

And I go to order backlog and inflow, very strong order inflow in the quarter, so you see 489, so it's the highest order inflow we have in any given quarter, so very pleased about that. And this is obviously driven by 4 of the announcements that I referred to on a previous slide and what has been announced to the market already.

Expect that to continue. We're building up for the summer season now and again, you should expect to see some contract awards over the next weeks rather than months.

Total backlog, you see it's stable at around 750 and the fact that we have a strong order inflow but very strong revenues obviously means that we eat a lot from that backlog, but again, we're very pleased that we're able to keep the backlog at the $750 million level heading into 2025.

And then on the right-hand side you see the expected timing of the contract backlog, and that helps you to tune your models in terms of how much of this will be used in in Q1, Q2, and going forward.

So again, expectations for Q1, we expect a normalize OBN crew count of between 2.5 and 3.

That's in Q1 is always the toughest quarter for our OBN business, but we expect that to be pretty good year on year. On the stream of 3D fleet utilization, we expect about 70%. And again, if you asked me 3 months ago, I would expect that number to be higher, but for, obvious reasons related to permit delays and environmental issues with some of that has been pushed slightly out.

Multi-client investments of about $110million to $120 million expected for Q1.

So that leads me to the summary. Again, very pleased about the 2024 results, also very pleased about the results for the full year.

And as I said, I'm extremely thankful to the whole organization who's managed to keep their eye on the ball in a very difficult time in terms of integration efforts and we have accelerated a lot of the actions taken after July 1st and overdelivered on some of the cost synergies, but over delivering on cost synergies means that there has been more work for the people.

But again, very pleased that our people have managed to deliver two strong quarters after the merger announced on, or closed on July 1st.

We have successfully refinanced all the facilities at very attractive terms. Our synergies are ahead of target.

As we've said 3 times already, very pleased about the board who decided to increase our dividend by 11% based on the current outlook. And then we expect to improve streamer utilization in 2025.

So that's all I had. I'm going to have Svan come up here and We're going to have a board manage their questions and then obviously open up for all of you to ask the questions you may have.

Thank you very much.

Kristian, we have an audience and, also I suggest we start with, those of you present in the auditorium. So, yes, John.

Wait for microphone so you.

Can just speak up. We have the microphone in the room.

We also on the outlook for 2025. You referred to consensus, and which seems to be indicating 3%, 4% or 2%,3%, and 4% offshore GP spending growth.

Is that your view on the seismic market as well, or do you expect the seismic market to grow stronger or weaker than that? Or any particular reasons why it potentially could grow better or worse than that?

I think in our current plans we probably base it on what we see in the overall EMP and spending and I think, over time they tend to correlate. And then your second question in terms of what could make it higher than the 2% or 3%, I think that mainly goes back to, how much of your exploration budget you allocate to drilling versus data. And we've seen that change quite a lot from year to year to year.

So in 2023, for example, there was a significant increase in the number of wells drilled, and you saw that more of the exploration budgets went to drilling and there was less left for seismic. In 204, it evened out a little bit and then obviously it's anybody's guess what's going to happen in 2025. But, I think overall, we base our plans on a 2% or 3% and then if it's higher than that, then obviously that's a positive surprise.

And may I ask maybe a little bit on the geographical, areas, did you see any geographical areas improving better than others and maybe in particular the Gulf of Mexico, where you,

which is America,

Of America, sorry. Where you have a lot of multi-client data, both new and older, and with the Trump, in the driving seats, will that improve the fundamentals for the government of America activities.

Significantly? I think, to answer your first part of the. Question, I think the majority of activity now is probably centered around the South Atlantic, so both sides of the region. Brazil is very hot, you see lots of activity, in Latin America, South America in general, so I think that's healthy and that's good.

Definitely, see an improved activity level in West Africa. So you know I talked about Namibia, Nigeria, Angola where we had activities in Q4. Africa is looking pretty good.

And then Norway is good. Norway is a good market, and I'm happy with the support we're getting from the Norwegian government in terms of licensing rounds and continued high activity on the Norwegian continental shelf, and the UK is the complete opposite, and I hope Norway look to UK when they're going to make decisions for the future because that's not being good.

Back to, Gulf of America, I think, it's clearly positive to our industry, what's happening now around the politics of removing some regulations, obviously, being very positive to increasing the domestic production in the US, if you speak to any.

Whether it's a super major or a small independent about, what do you think about the changes in the politics now related to energy. I mean, they're clearly very positive.

I wouldn't, be standing here and say that we're going to see the impact of that immediately because there's a lot of signatures that you still need and there's still some bureaucracy to go through. So it starts with a drill baby drill, but it's still going to take some time from that until you see licensing rounds, new areas opening up, etc. Etc. So.

What would that, mean in terms of 25? Well, hopefully we get a lease sale, and I think chances are probably better now with the new administration that you get a, you get some kind of an acceleration of that.

But I cannot promise that and based on, industry people that I talked to, I guess I would say if I, if you were challenging me on a number, I would say it's probably a fifty-fifty. I don't think that matters too much because the more important thing is that you will see increased activity and that you will see increased activity both onshore and offshore. And you may see new areas opening up, in the US.

Fifty-fifty for at least round in the second half.

Probably slightly higher than that in terms of the chances, but again, now I'm just referring to, talking to industry people and talking to our clients in terms of what they expect.

Have you seen? It's been, it's been like almost like a couple of months now with the, well, actually a few weeks since he took his new seat, but I guess a few months since the election was took place. Have you seen the increase? Did you see better sales in Q4 in Gulf of America? Have you seen or improving leads, etc.

It's hard to say, what, we had good sales in Q4 related to the Gulf of America and whether that's related to the new. Government or whether it's just related to a Q4 effect that we always have, it's hard to say, but I think what I can definitely confirm is that people we talk to, whether it's super majors or small independents are far more positive in terms of the outlook for US, oil and gas production for.

Sure. I think so. I have more questions, but I think I'll let the words over to others first and maybe I could go back. .

Yes, no Problem, Erik.

Yes, I want to talk about the streamer fleet. You said 70% of the investments were going to be done internally. I'm just wondering if you could give us some more indications on, for example, how you're going to split the streamer fleet capacity like TGS used to do in terms of, percentage, stream now contract versus multi-client or give an indication are you doing.

More internally on the streamer fleet from a declined, this year versus last year or less or sort of similar level.

It's probably worth a one on one discussion with Sven and the team, but I think, in the big scheme of things, I, this is highly uncertain and there is a very fine balance now between multi-client and contract and you will see some of the contracts we have announced over the past few months they may actually be recognized as multi-client because we're using our permits.

Yes, there is one block holder and we get significant pre-funding. Some cases more than 100%, but it's kind of a, whether we call it a contract or a multi-client, it doesn't really matter a whole lot except for the accounting of it. But I think that's something you can follow up, one on one.

I will, and on day rates or margins pricing, for the, streaming market. Based on my numbers at least, there was really strong pricing there in in 2024, and I'm just wondering how you see that developing into 25.

Yes, we don't plan for any significant changes in that regard. I think, pricing is now, I wouldn't say it's strong because then our clients would come back and complain,

But I think it's healthy and you need a healthy industry and of course, with two major players in that industry, you, you're depending on some kind of discipline and you're dependent on companies, measuring their performance and return on capital rather than revenues, right?

And I think, we see that, finally, after 15 years since I, you see some discipline in terms of the fact that you need to have, you need to consider return on capital when you price some of these jobs. So I think, we don't plan for an increased pricing, but we plan for pretty much what you saw in 2024, which is quite reasonable and healthy.

One quick last one too [isannberger], on the course cost guidance that you gave, how much should we kind of assume for lease payments?

On that figure, is it can be extrapolate on the lease?

Oh. No, but it should be extrapolate on Q4 figures. So.

Yes, it depends a little bit on the strategy we choose in terms of going on long-term leases, slightly longer term leases which would, which would require us to do IS 16 accounting or slightly shorter leases.

But I wouldn't expect it to change massively going forward from what you've seen over the past few quarters with a little bit of disclaimer to that depending on what you choose to.

Do that.

Thank you.

Yes, we have a question from Christopher. Yeah.

Christopher in Paramount one, I know we don't disclose this any longer, but could you give an indication on the current pre-funding levels? Is it fair to assume around 100%?

Yes, and that could vary from 80 and above 100, but I think overall, the trend is that our services are significantly higher funded than they were 2 or 3 years ago. And the reason for that is obviously that the project mix is very different in terms of having more of these converted contracts.

In terms of the multi-client sales in 4th quarter, were there any regions standing out or any sales you would highlight? And is it also fair to assume that there were no significant transfer fees in 4th quarter?

Yes, that was, it was a good quarter overall. I think we had a very good distribution of sales in terms of there was no one particular geography that that stood out. I think if you look at our data library right now, of course we have a big library in the Gulf of America. We get a really big library in Brazil. We're quite excited about the new blocks that have been announced in Brazil.

So overall, I think, yeah, more, probably more on the western hemisphere than the eastern hemisphere, but overall it was good across the board.

On the guidance you give on gross costs for 2025, does that include, also that when you charter capacity to do multi-client, that's part of those costs.

That's what we, that's our internal cost. So whatever we charter, externally will be, booked directly to the balance sheet.

And final question, it's not been, typical multi-client market, but it's been a strong contract market for some years now. Could you share your outlook on India going forward?

Yes, India is very interesting. You, we have already announced a contract in India and I think there will be more work in India after this first phase that we're doing now and it is definitely one of those countries where we're going to be, hopefully going to be for the long-term.

Thank you.

Okay, we have some questions from the people on the webcast. Andre Uggedal from SEB.

Many new campaigns already announced for the North Sea season and more to come. How, many streamer vessels do you expect to have working in the North Sea, the summer season?

Yes, we haven't decided yet how many it will be, but it will definitely be more than 2 and less than 5, but we still are in the planning phase in terms of how many vessels we're going to be using there and also the split of multi-client and contract.

Of course. He also has the questions regarding pricing, if we can say something regarding pricing for the 25 season versus the 24 season, we kind of touched upon it already.

Touched on that.

Yes.

Then we have, Jorgen Lande in Danske Bank, report gross debt of approximately $650 million.

Is it fair to expect the remaining $30 million of CF to be paid in 2025?

Yes, we are, we're settling that now in February.

So yes. We kind of touched upon the prefunding aspect.

Yes, there's any additional questions from the web beyond those we have already from the audience. Yes, we have a follow up from John.

Yes, may I follow up on the cost? Say that the run rate for the synergies are now $100 million Does that include financial synergies?

Yes.

So, and so I guess it includes all the financial synergies, so the remaining would be no in opex cost. So in the gross operating cost guidance of 1,050 or 25, how much synergies have you included in that?

Yes, we have included, we have included all, basically all that we have a little bit as to still be realized, but there are, it's that we've used that 100% we have realized for now as a starting point and then assume that we will get to the. We will realize the rest during the year.

It's 100 minus 35,

yes and then you have a lot of synergies that's not part of the, of the gross cost number necessarily.

The financial synergies are 35. Synergies and yes, so you got 65 realized and others now and another 30 plus to go.

Yes, and some of those synergies are utilization synergies and it's a bit uncertain exactly how that will materialize in the P&L, of course.

And then question on the vessel capacity, on the stream of vessel capacity.

You, as com already, you reported a lot of contracts and you have seem to have fairly good visibility on the multi-client investments that you're planning to do. May I ask how much more capacity do you have available for the first three quarters of 25 right now?

Yes, for a while, we were sold out for Q1, and then we've had some delays and obviously, that creates a lot of, you need to move vessels, elsewhere and find all the work for that. So that is impacting our utilization for Q1. Q2 and Q3, there's not much capacity. Most of it is already booked and You will probably see some announcements over the next few weeks or so where we basically we feel very good about utilization for those two quarters.

Sold out for the 1st 3 quarters.

Yes, and that's part of the challenge with our industry is that if something is pushed from Q1 to Q2, you may not have that capacity in Q2, so you may actually push it from Q1 to Q4.

So, we have some of those issues that we're dealing with and, but overall, obviously having. A big multi-client business is great in that regard, in the ideal world, we would do 100% contracts in Q2 and Q3, and then we would do all the multi-client in Q1 and Q4. It's not that easy, of course, but that's kind of what we're aiming for to balance our portfolio, make sure that we optimize the utilization.

And all these issues with utilization for Q1. This is like what we heard continuously from PGS and they were the vessel owners over the years.

Now that there are only 2 pairs and you're more disciplined and your vessel, the visibility on what your vessel going to do is improving. Is it possible to get rid of this?

So, tell the oil companies if you haven't got a permit, you won't get a contract or like you have to pay us to stand there waiting for a permit or something like that, or is, are you too still too weak? Do the do the oil companies have the still have the upper hand? To get rid of these short term surprises with weak utilization due to issues out of your hands.

Yes, I wish so. They're definitely strong. I mean, there is still pricing power on the old company's hands and, but I think over time you, you're getting there, and I see that in both the OBN business and the streamer business that there is an acceptance that you cannot put all the risk on the supplier.

So, again, we're working on it and. And again, you're still going to have surprises. This is a tough business to manage utilization because the contracts are so short and there's so much uncertainty about permits, for example.

So again, I cannot promise you that we're going to fix it overnight, but what I can promise you is that we're working really hard to maximize utilization by using multi-client and using those existing permits that we have pretty much all over the world.

My final question is on dividends. You guiding on dividend is technically is it Q4 dividend paid in Q1 or is it Q1 dividend?

No, this is, in IFS you pay, you pay the dividend when, you charge.

You booked the dividend when you pay it.

So there's a Q1. And it's and the guide, the number you guided, that's for Q1, or should we take it as the guided dividend for all the quarters?

Yes. So what we normally do is that we set a new dividend level in Q1 and although we don't make a 100% firm promise, you should expect the same dividend level throughout the year.

Any chance [anypo] because you mentioned that you hope you have and you think you got more capacity over time for long, longer terms and better, but the longer term, could that be 6 months like any chance we could have a high dividend during 25?

It could, it depends on a number of factors, the market and other things. So, I won't rule it out, so we'll have to see.

Thank you.

Very good. Unless there's any last questions from the audience in Oslo, I thank you all for coming and also thank you.