Pulse Seismic Inc. · TSX:PSD
Pulse Seismic — Investor Presentation (October 2022)
37 slides from Pulse Seismic's investor presentation, October 2022
Slide 1: Corporate Presentation Q3 2022
Corporate Presentation Q3 2022
Slide 2: Advisories
ADVISORIES FORWARD-LOOKING NON-GAAP MEASURES INFORMATION This presentation contains non-GAAP measures. The Company’s continuous disclosure documents provide This presentation contains information that constitutes discussion and analysis of “EBITDA”, “EBITDA per share”, “forward-looking information”
Slide 3: We Are Canada's Largest Seismic Data Library Provider
WE ARE CANADA’S LARGEST SEISMIC DATA LIBRARY PROVIDER
Slide 4: Licensed Multiple Times
65,310 Sq. km of 3D seismic LICENSED MULTIPLE 829,207 Lin. km of 2D seismic TIMES DATA LIBRARY SALES • Oil and gas producers of all sizes and new energy companies license our digitally stored 2D and 3D data. • We are a pure-play seismic data library company. The library is our main asset. • Pulse op
Slide 5: Metrics That Matter
METRICS THAT MATTER CASH MARGIN EBITDA SHAREHOLDER FREE CASH FLOW We are a data-driven, cash- EBITDA is calculated as EBITDA plus non-cash and based business. Pulse’s cash earnings or loss from non-recurring expenses, less margin on data library sales operations before interest, interest on long-ter
Slide 6: Key Trading Facts
KEY TRADING FACTS Information as at September 30, 2022, unless otherwise specified PULSE SEISMIC INC. Trading Symbols TSX: PSD OTCQX: PLSDF TSX: PSD Corporate Headquarters Calgary, Alberta, Canada OTCQX: PLSDF Stock Price $1.90 Shares Outstanding 53,634,317 Avg. Daily Trading Volume (Q3 2022) 31,779
Slide 7: Q3 2022 YTD Financial Results
Q3 2022 YTD FINANCIAL RESULTS $7.1MM TOTAL REVENUE • $7.1M total revenue $5.6MM SCB and OTHER SG&A EXPENSES • Revenue includes $6.9M in data sales split $217,000 transaction-based sales and $6.7M in traditional sales $1.6MM plus $197,000 in other revenue EBITDA $2.3MM SHAREHOLDER FREE CASH FLOW $Nil
Slide 8: The Company We Have Built
THE COMPANY WE HAVE BUILT Positioned for volatile commodity-price environment COSTS AND SPENDING CREDIT FACILITIES Pulse’s operating costs were $5.6M in the first three quarters of Debt consists of a $25.0M revolving 2022, generating positive EBITDA (23% of data sales) and credit facility, with a ma
Slide 9: Value in Our Business
VALUE IN OUR BUSINESS
Slide 10: Understanding Our Business
UNDERSTANDING OUR BUSINESS Simplified geological column, greater Alberta What We Do: Deep Basin Pulse’s business model: To repeatedly relicense high-quality 2D and 3D data to traditional and new energy companies. Why 2D: 2D seismic allows exploration companies to plan broad land acquisition programs
Slide 11: 3D Seismic Enables Detailed Modelling of Geologically Complex Targets
3D SEISMIC ENABLES DETAILED MODELLING OF GEOLOGICALLY COMPLEX TARGETS › 3D seismic is more detailed and more expensive to shoot. › Critical for most horizontal drilling, unconventional plays like shale gas and tight light oil formations, as well as complex conventional drilling. › Pulse owns 65,310
Slide 12: Pulse: A Western Canada Market Leader
PULSE: A WESTERN CANADA MARKET LEADER ESTIMATED CANADIAN 2D MARKET ESTIMATED CANADIAN 3D MARKET 24,232 Others Schlumberger 10,827 829,207 PUL SE 65,310 TGS Arcis 18,639 2D 3D (km2) PUL SE (km) 39,552 SEI Seismic Exchange 2,767 Divestco (Charts exclude seismic data held proprietarily by E and P Compa
Slide 13: Western Canada Data Library Play Coverage
WESTERN CANADA KEY PULSE DATA Data Library LIBRARY AREAS Play Coverage Montney 2D Coverage 191,726 km 3D Coverage 40,274 km2 Deep Basin 2D Coverage 127,505 km 3D Coverage 24,109 km2 Duvernay 2D Coverage 265,008 km 3D Coverage 24,313 km2 Cardium 2D Coverage 102,901 km 3D Coverage 9,642 km2
Slide 14: Our Customers: Diverse and Long-Term
OUR CUSTOMERS: DIVERSE AND LONG-TERM PULSE’S CUSTOMERS: › New energy customers include those › Concentrated in Alberta’s oil and exploring for hydrogen, lithium and natural gas and new energy geothermal, as well as related industries. resources such as helium, and those › 63% of purchases during the
Slide 15: Generating Revenue: Two Types of Library Data Sales
GENERATING REVENUE: TWO TYPES OF LIBRARY DATA SALES TRADITIONAL SALE TRANSACTION-BASED SALE A straightforward license New licensing fees on already- of 2D or 3D data from licensed library data triggered Pulse’s library related to by a change in control over the drilling in new areas or licensee or t
Slide 16: Drivers of Traditional Data Library Sales
DRIVERS OF TRADITIONAL DATA LIBRARY SALES
Slide 17: Types of Transaction-Based Sales
TYPES OF TRANSACTION-BASED SALES PARTNERSHIPS & CORPORATE JOINT VENTURES MERGER/ACQUISITION ASSET SALE New technical or Buyer has 30 days to Seismic licence does not operational participants decide to pay a transfer with the asset. must purchase a data discounted relicensing fee Pulse gains a potent
Slide 18: Seismic Data for Subsurface Exploration
SEISMIC DATA for SUBSURFACE EXPLORATION Existing and technology enhanced seismic data improves subsurface characterization for oil and gas and energy transition exploration. Pulse’s existing and technology optimized data improve subsurface characterization for structural mapping and validating and u
Slide 19: Data Sales Profiles
DATA SALES PROFILES Traditional Sales Transaction-Based Sales 44,877 TRADITIONAL & TRANSACTION-BASED 35,775 SALES ($MM) 31,762 19,473 19,163 19,606 19,114 16,629 12,942 11,763 11,095 10,119 9,970 9,239 7,605 6,740 4,271 4,369 4,029 949 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Slide 20: Growing the Data Library: Two Methods
GROWING THE DATA LIBRARY: TWO METHODS More Data Increases Future Revenue-Generating Capacity ACQUIRE EXISTING DATA PARTICIPATION SURVEYS › Pulse purchases high-quality proprietary datasets from competitors › Have not conducted a survey since 2015 or E&P companies. › Surveys were designed and managed
Slide 21: Growing the Seismic Library
SIZE OF THE SEISMIC DATA LIBRARY GROWING THE SEISMIC 900,000 70,000 800,000 LIBRARY 60,000 700,000 50,000 600,000 3D (sq. km) 500,000 40,000 › January 15, 2019, Pulse acquired 100 percent of 2D (km) the shares of Seitel Canada Ltd. for $62.8MM. Includes approximately 36,354 net square 400,000 30,000
Slide 22: Strategic Investments at Opportune Moments
STRATEGIC INVESTMENTS AT OPPORTUNE MOMENTS › Acquired seismic assets from Divestco in 2010. › Acquired 100% of shares of Seitel Canada Ltd. › Purchase price of $75.5MM included $55.5MM in cash plus 14.3MM Pulse › Purchase price of $58.6MM including common shares. $53.6MM cash on closing, $5MM deferr
Slide 23: Current Seismic Coverage
CURRENT SEISMIC COVERAGE Western Canada’s Premium Licensable Seismic Dataset 65,310 Sq. km of 3D seismic 829,207 Lin. km of 2D seismic
Slide 24: Value in Our Results
VALUE IN OUR RESULTS
Slide 25: Seismic Data Library Sales Strongly Correlate to Shareholder Free Cash Flow
SEISMIC DATA LIBRARY SEISMIC DATA LIBRARY SALES VS. SFCF PER SHARE SALES STRONGLY 70.0 0.90 CORRELATE TO 60.0 0.80 SHAREHOLDER FREE 0.70 ($/Diluted Weighted Share Outstanding) 50.0 CASH FLOW 40.0 0.60 0.50 ($MM) 30.0 0.40 0.30 20.0 0.20 10.0 0.10 0.0 0.00 Seismic Data Library Sales ($MM) SFCF per Sh
Slide 26: How We Calculate Shareholder Free Cash Flow (SFCF)
Three months ended September 30,Nine months ended September 30, ($MM except per share) 2 022 2021 2 022 2021 2021 Full Year Data library sales 2 ,163 8,832 6 ,934 32,545 48,717 HOW WE Other Revenue 15 100 197 300 433 CALCULATE Less: Salaries, internal commissions and benefits 874 919 3 ,364 2,785 4,
Slide 27: Third Quarter Highlights
Three months ended September 30, Nine months ended September 30, (thousands of Canadian dollars except Years ended per share data and numbers of share) December 31, 2022 R evenue 2022 2021 2022 2021 2021 THIRD Data library sales Other Revenue 2, 163 15 8,832 100 6, 934 197 32,545 300 48,717 433 QUAR
Slide 28: Value for Shareholders
VALUE FOR SHAREHOLDERS
Slide 29: Shareholder Value Through Dividends and Share Purchases
SHAREHOLDER VALUE THROUGH DIVIDENDS DIVIDENDS AND SHARE PURCHASES ($MM) AND SHARE PURCHASES Dividends ($MM) Share Purchases ($MM) 10.9 10.8 10.5 TOTAL SPENDING ON DIVIDENDS AND SHARE PURCHASES ($MM) 8.4 8.4 7.1 6.3 5.3 5 4.8 $46.5 4.7 4.5 4.1 3.5 3.4 $114.2MM 2.8 2.3 2.2 2.0 1.7 2003-2022 2 1.0 0.67
Slide 30: Ten-Year Allocation of Funds
TEN-YEAR ALLOCATION OF FUNDS 2012-2021 FUNDS AVAILABLE ($MM) FUNDS ALLOCATED ($MM) Long Term Debt $35 Common Share Purchases $36 Equity Financing Debt $80 Repayments $3 Cash and Working Capital $21 Dividend Net Capital Payments $100 $31 Expenditures $208 Shareholder Free Cash Flow
Slide 31: Our People
OUR PEOPLE EXECUTIVE MANAGEMENT TEAM Neal Coleman Pamela Wicks Trevor Meier President & CEO Vice President Finance Vice President & Chief Financial Sales and Marketing Officer DIRECTORS Robert Robotti, Chair of Pulse Seismic Melanie Westergaard Dallas Droppo President and CIO, Robotti & Company Advi
Slide 32: Financial Appendix
FINANCIAL APPENDIX
Slide 33: Consolidated Statements of Financial Position
(thousands of Canadian dollars) (unaudited) September 30, 2022 December 31, 2021 As sets Cash and cash equivalents 5,811 - CONSOLIDATED Trade and other receivables 1,080 15,030 Current tax assets 468 - Prepaid expenses 249 363 STATEMENTS Tot al current assets 7,608 15,393 Participation surveys in pr
Slide 34: Consolidated Statements of Comprehensive Earnings (Loss)
Three months ended September 30, Nine months ended September 30, CONSOLIDATED (thousands of Canadian dollars) (unaudited) Revenue 2022 2021 2022 2021 STATEMENTS OF Data library sales Other revenue 2,163 15 8,832 100 6,934 197 32,545 300 COMPREHENSIVE Tot al revenue 2,178 8,932 7,131 32,845 EARNINGS
Slide 35: Consolidated Statement of Cash Flows
Three months ended September 30, Nine months ended September 30, (thousands of Canadian dollars) (unaudited) 2022 2021 2022 2021 Cas h flows provided by (used in): CONSOLIDATED O perating: Net earnings (loss) and comprehensive income (loss) (1,675) 3,164 (5,959) 13,356 STATEMENT OF Adjustment for: A
Slide 36: Capital Structure
CAPITAL STRUCTURE SHARES OUTSTANDING AT YEAR-END ($MM) 67.2 66.0 › Authorized unlimited number of 61.1 59.3 common and preferred shares 57.2 55.9 55.6 54.0 54.0 54.0 54.0 54.0 › 53,784,717 common shares (MILLIONS OF SHARES OUTSTANDING) outstanding (December 31, 2021) 2010 2011 2012 2013 2014 2015 20
Slide 37: Pulse Seismic Inc.
Pulse Seismic Inc. 2700, 421 7th Avenue SW. Calgary, Alberta T2P 4K9 Toll-free: 1.877.460.5559 Telephone: 1.403.237.5559 Email: [email protected]