SAExploration planning big spend

Houston-based seismic company intends to use a $150 million senior secured note to purchase equipment for Alaska operations

Eric Lidji

For Petroleum News

The seismic firm SAExploration Holdings Inc. plans to spend $20 million on equipment for its Alaska operations during the fourth quarter, the company said in recent filings.

In June 2014, the Houston-based company announced plans to sell up to $150 million in senior secured notes to repay certain debts, fund Alaska purchases and pay other costs.

Even with falling oil prices, “Overall we remain assured in our ability to maintain our strong position within our core markets as we begin turn our attention towards 2015,” President and CEO Brian Beatty said during a quarterly earnings call with analysts. “Our current expectations for next year are in large part based on increased exploration activities in Alaska which we believe will be our strongest near-term growth market.”

Through the third quarter, the company had signed contracts for nearly $27 million in equipment for its Alaska operations, of which nearly $10 million went on the books for the third quarter. Those expenses contributed to a nearly $23 million net loss for the company during the quarter. But increased revenues tempered the losses, year over year.

SAExploration reported revenues of nearly $120 million through the first nine months of the year from its North American operations, a 39.4 percent increase over the same period last year, driven largely by increased seismic activities across the North Slope.

South American Exploration began conducting seismic operations in Peru in 2006.

In 2011, after expanding across South America and into Pacific markets including Australia, the company acquired Datum Exploration in Calgary and Northern Exploration Services in Alaska and established North American operations as SAExploration.

By the end of 2013, SAExploration Alaska was already a familiar face in Cook Inlet and the Interior, contracting projects for Linc Energy Ltd., Hilcorp Alaska LLC and Doyon Ltd. and permitting a program over the waters of the upper Cook Inlet. (The program overlapped with a program being permitted by Furie Operating Alaska LLC.)

Currently, SAExploration Inc. is proposing a 3-D seismic program for the Cook Inlet Outer Continental Shelf. The company had originally proposed the survey for this coming winter but deferred the program to the latter half of 2015 due to permitting delays. The 697.9 square mile survey would hug the southern Kenai Peninsula.

In November 2012, SAExploration and the Native corporation Kuukpik Corp. formed Kuukpik SAE LLC, a joint venture for North Slope seismic programs. The joint venture will last for five years. SAExploration owns a 49 percent interest in the joint venture.

In the latter half of 2013, the joint venture proposed the Colville Delta 3-D Seismic Survey over portions of the Oooguruk, Nikaitchuq and Kuparuk River units and the Umingmak 3-D Seismic Program around Nuiqsut. Both were three-year programs.

The company typically sub-contracts for its seismic surveys in Alaska and Canada.

SAExploration credits its expansion in Alaska to Executive Chairman Jeff Hastings, who founded Fairweather Geophysical and continued managing Alaska operations when Veritas DGC acquired Fairweather and when CGGVeritas acquired Veritas DGC.