Seabird Exploration Plc: Annual Report 2023 »

SeaBird Exploration Plc

Annual Report

2023

©G. King

Annual Report 2023

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Table of content

Financial highlights for the Group	3
Letter from the Chairman	4
Group Management	5
Board of Directors	6
Environmental, social and corporate governance	7
Transparency Act	17
Management Report	25
Consolidated Financial Accounts	29
Separate Financial Accounts: Seabird Exploration Plc	77
Independent Auditors' Report	93
Declaration of the Members of the Board of Directors	100

Annual Report 2023

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Financial highlights for the Group

	Year ended 31 December
All figures in USD 000's except equity ratio	2023	2022
Revenues	34,635	20,164
Cost of sales	-19,062	-19,036
SG&A	-3,969	-3,889
EBITDA*	8,665	-1,276
EBIT*	2,411	-9,617
Profit/(loss) for the period	3,127	-11,605
Capital expenditures	2,745	3,895
Total debt	16,234	16,287
Net interest-bearing debt*	14,058	15,436
Equity ratio*	50%	45%

Note* see Note 34 in Consolidated Financial Accounts for definitions.

Annual Report 2023

Letter from the Chairman

I am very pleased to see Seabird Exploration report a positive net result for 2023 and would like to thank all our employees for your dedication and hard work.

The Q1 2023 spin-off of Green Minerals marked the final leg in the restructuring of the Group. Through the restructuring, we firmly believe we have right-sized the cost level, high-graded our capacity to industry-leading standards, amended our operating model to enable excellence in the product we deliver and rearranged into an appropriate funding structure. We are pleased to see these efforts finally beginning to show in the company`s numbers.

While we have succeeded in making long term OBN source work the backbone of the Company, the main challenge for 2024 is to further leverage on our considerable track record and capacity for 2D work. While being an erratic business, the increased need for energy security in many countries means the demand for 2D seismic will continue. The Company perceives competition to be low, providing a promising backdrop for strong profitability for the few who are left.

The structural growth in OBN continues unabated and the segment now constitutes more than 40pc of all offshore seismic activity, up from around 15pc before the large downturn in oil markets started in 2014. The OBN source market is in our opinion tighter now than it was at the last peak, but rates have failed to recover to previous highs of around USD 80,000 per day. We believe rates need to continue to improve, though, as seismic equipment & vessel economics are far from where they need to be to give an adequate return. Considering the extended downturn from 2014, vessel economics need to overshoot the "average" profitability just to catch up. Indeed, looking at the more than 50% reduction in vessel supply in the segments relevant to SeaBird and no newbuild orders in sight, the 60% or so growth in OBN demand over the same period implies that something has to give. That something is usually day rates.

Admittedly, while being a public company has many advantages, it can also create some constraints depending on how our equity is priced in the marketplace at any time. We continue to be strong advocates for the need for further consolidation in our industry, and believe recent trends support our argument. Notwithstanding this, we are confident that SeaBird Exploration following the restructuring is well positioned to take advantage of current trends in the energy markets. Recent industry-leading contract awards testifies to this. And we have both organization and equipment to do more in a market that is improving.

Seabird enters 2024 with a strong order backlog, a solid balance sheet and significant cash flow. Following a swift repayment of close to half the Company`s debt in 2022/23, our capital allocation focus has now turned to begin distributing cash to our shareholders. Indeed, in the Q4 2023 report we announced the first cash dividend in the Company`s history together with an unambiguous target to pay out all excess cash to shareholders on a quarterly basis going forward.

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The Company continuously monitors opportunities that can support profitable growth under the constraints mentioned above.

Finally, I`d like to take this opportunity to thank everyone at SeaBird for your dedication and can-do-attitude. Always doing our utmost to deliver the best possible result to our clients keeps Seabird competitive. Let`s keep up the good work!

Thank you!

Sincerely,

_______________________________________

Ståle Rodahl Executive Chairman SeaBird Exploration

Annual Report 2023

Group Management

Finn Atle Hamre - Chief Executive Officer.

Position held from 2021.

Mr. Hamre has held the position as Chief Operating Officer of the company since June 2018, before taking over as CEO in 2021. Mr. Hamre has more than 25 years of experience in the Offshore Oil and Gas industry across both European and Asian markets. He has more than 15 years of experience in senior

executive management

positions including VP, MD, CCO and CFO. He holds a B.Eng. (Hons) in Naval Architecture, and a Master of Business Administration.

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Sveinung Alvestad - Chief Financial Officer.

Position held from 2022.

Mr. Alvestad has joined the company as Director M&A in May 2021 and appointed CFO in August 2022. He has worked in investment banking for about 10 years, with a special focus on research on renewables and energy markets and companies. He holds a MSc in Industrial Economics and Technology

Management from the

Norwegian University of Science and Technology (NTNU) in Trondheim. His engineering specialization is within electrical energy while the economics specialization is in investment, finance and financial management.

Annual Report 2023

Board of Directors

Ståle Rodahl - Executive Chairman of the board

Ståle Rodahl has served 30 years in the financial industry, amongst others as a hedge fund manager and in various executive positions in the Investment Banking industry in New York, London and Oslo and in companies such as Alfred Berg, ABN Amro and ABG Sundal Collier. He has also served on the Board of Directors

in companies in other industries. Mr. Rodahl holds a MSc with a major in Finance from the Norwegian Business School, BI with additional programs from London School of Economics (LSE) and NASD, New York.

Øivind Dahl-Stamnes- Director

Øivind Dahl-Stamnes has worked 36 years in the petroleum industry in Norway and internationally. He has held executive/management positions in Equinor and Esso/Exxon for more than 15 years within exploration and production operations. Recent assignments in Equinor include Vice President positions for the

Troll field, the North Area Initiative and Partner Operated Licenses. He has also served as chairman and member of numerous Production License Management Committees for Equinor and Esso. Mr. Dahl-Stamnes holds a master's degree in geology from NTNU in Trondheim.

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Sverre Strandenes - Director

Sverre Strandenes has worked more than 35 years in the oil and gas industry,and has extensive experience from the seismic industry. He obtained an MSc degree in geophysics from the University in Bergen in 1981. Following that, he held various positions in Norsk Hydro E&P division within the Research Center and the Exploration

Department. In 1995 he joined PGS where he has held several senior/executive management positions, most recently as Executive Vice President Sales & Services.

Hans Christian Anderson - Director

Hans Christian Anderson works as a portfolio manager for one of the company's largest shareholders, Anderson Invest AS. He founded his first company when he was 18 years old and has a broad, international background as an investor in multiple industries. Mr. Anderson also serves on the board of directors of other companies.

Odd Sondre Svalastog Helsing - Director

Mr. Helsing currently holds the position as investment manager at MH Capital AS, the Company's largest shareholder. Mr Helsing has worked more than 11 years in finance and prior to joining MH Capital AS held the position as Co-Head of Equity and Sales at Clarksons Platou Securities. Mr. Helsing holds a bachelor's in economics

and business administration from Norwegian School of Economics (NHH). He is a Norwegian citizen and resides in Norway.

Annual Report 2023

Environmental, Social, and Corporate Governance

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Environmental, social, and corporate governance

1.	Sustainability governance	8
2.	Our approach to ESG and their integration into our strategy	8
3.	Environment performance	9
4.	Social performance	10
5.	Governance performance	12
6.	Targets and progress	14
7.	Future goals and plans	14
8.	Stakeholder engagement	14
9.	Disclaimer and assumption for the ESG reporting	15
10.	Appendix: Sustainability accounting norms	16

Annual Report 2023

Environmental, Social, and Corporate Governance

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1. Sustainability governance

Sustainability governance in the shipping industry is a crucial element to ensure responsible and sustainable operations, considering the growing awareness of environmental and social issues. International organisations, such as the International Maritime Organisation (IMO), play a pivotal role in developing and implementing regulations to address the environmental impact of shipping activities. Examples include the International Convention for the Prevention of Pollution from Ships (MARPOL) and the Energy Efficiency Design Index (EEDI), which aim to set standards for pollution prevention and reduce greenhouse gas emissions.

Market-based mechanisms, including sustainability indices, sustainability-linked loans, and other financial instruments, can incentivise environmentally friendly behaviour in the shipping industry. Shipping companies also contribute to sustainability governance by integrating sustainable practices into their operations, developing policies, and reporting on their Environmental, Social, and Governance (ESG) performance.

Stakeholder engagement is another critical aspect of sustainability governance in shipping. Collaboration with customers, suppliers, governments, and NGOs helps shipping companies understand sustainability expectations and needs, fostering collaborative initiatives. Stakeholder engagement also builds trust and support, essential for long-term sustainability.

SeaBird Exploration acknowledges the inherent risks in the shipping industry related to pollution, spills, health and safety, and corruption. The company has implemented robust policies and controls to manage these risks, ensuring compliance with international and local laws. Oversight of SeaBird Exploration's ESG policy falls under the responsibility of the Board of Directors, which considers ESG issues throughout the year and reviews the Code of Conduct and corporate governance structure annually.

The Chief Executive Officer (CEO) oversees SeaBird Exploration's operations, with Technical Managers handling incidents on the front line. Regular training ensures that the team is equipped to carry out their duties in a vigilant and safe manner. Continuous monitoring and reporting allow for management follow-up, and significant cases are reported to the Board of Directors.

In alignment with the Norwegian Corporate Governance Code, SeaBird Exploration's commitment to sustainability is evident in its consideration of the United Nations' Sustainable Development Goals (SDGs). The company believes in contributing positively to the broader global agenda and collaborates with industry, customers, suppliers, investors, and regulators to make a meaningful contribution towards achieving the SDGs.

Material issue	Internal	International standards
	governance	and references
	documents
Climate	Environmental	The Paris Agreement
change	policy (HSE	The Intergovernmental
	policy)	Panel on Climate
	SeaBird	Change (IPCC)
	Exploration KPIs	Initial IMO Strategy on
		Reduction of GHG
		Emissions from Ships
Air emissions	Environmental	IMO MARPOL
	policy (HSE	Convention Annex VI
	policy)	EU Sulphur Directive
	SeaBird	2016/802
	Exploration KPIs
Ecological	Environmental	UN Global Compact
impact	policy (HSE	IMO MARPOL
	policy)	Convention Annex VI
	SeaBird	IMO Ballast Water
	Exploration KPIs	Management
		Convention
		Hong Kong Convention
Anti-	Company's	UN Global Compact
corruption	Code of	The US Foreign Corrupt
	Conduct	Practices Act and the
	SeaBird	UK Bribery Act
	Exploration KPIs
Employee	Company's	UN Global Compact
health and	Code of	ILO Conventions
safety	Conduct	Maritime Labour
	HSE policy	Convention, 2006
	SeaBird	International
	Exploration KPIs	Management Code for
		the Safe Operation of
		Ships and for Pollution
		Prevention (ISM Code)
		Hong Kong Convention
		Marine Crew Resource
		Management
Accident	Safety	International
and safety	management	Management Code for
management	system	the Safe Operation of
		Ships and for Pollution
		Prevention (ISM Code)
		Marine Crew Resource
		Management

2. Our approach to ESG and their

integration into our strategy

SeaBird Exploration, a global provider of high-quality marine seismic data, places a significant emphasis on Environmental, Social, and Governance (ESG) factors within its operations. This ESG report, covering the period from January 1, 2023, to December 31, 2023, provides a comprehensive overview of the company's performance in environmental sustainability, social

Annual Report 2023

Environmental, Social, and Corporate Governance

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responsibility, and corporate governance across all regions of operation.

The commitment to ESG at SeaBird Exploration stems from the belief that responsible business practices not only benefit stakeholders but also contribute to the long-term sustainability of the business. The primary goal is to create value for shareholders while minimising environmental impact and positively contributing to local communities.

The report adopts a transparent and data-driven approach, leveraging internal and external data sources to evaluate performance against industry benchmarks and standards. SeaBird Exploration's commitment to ESG is evident in its strategy, policies, and operations, and the report serves as a demonstration of progress towards ESG goals. Recognising continuous improvement opportunities, the company remains dedicated to enhancing ESG performance in the years ahead.

The areas of focus include:

• Ensuring the safety of personnel.
• Establishing a profitable and sustainable business.
• Upholding good governance and adherence to regulations.
• Preserving the environment.

Aligned with the United Nations Global Compact's ten principles and the Sustainable Development Goals (SDGs), SeaBird Exploration's Sustainability Strategy aims to contribute to the SDGs by 2030. The company endeavours to report actions and initiatives in accordance with international standards and frameworks, inviting stakeholders to engage in its ESG journey and collaborate in building a sustainable future for the business and the broader community.

3. Environment performance

At SeaBird Exploration, we place a paramount emphasis on environmental sustainability and are unwaveringly committed to minimising our impact on the environment. Our environmental management strategy is shaped by the principles set forth in the United Nations Sustainable Development Goals (SDGs), with a specific and dedicated focus on SDG 13 (Climate Action) and SDG 14 (Life Below Water).

SeaBird Exploration recognises the vital role of the shipping sector in global trade and commerce and acknowledges its responsibility to contribute to Sustainable Development Goal (SDG) 13, which emphasises urgent action to combat climate change and its impacts. As a part

of this commitment, SeaBird Exploration places a strong focus on environmental protection by meticulously monitoring and managing emissions, discharges, and spills that could pose environmental and ecological hazards within the shipping industry.

The company's comprehensive environmental policy encompasses various aspects, including environmental due diligence, carbon dioxide emissions, sulphur oxide emissions,

nitrous oxide emissions, waste management, and spill prevention. SeaBird Exploration's adherence to the Ship Energy Efficiency Management Plan (SEEMP) and a robust accident reporting system ensures diligent and responsible operations. The company's ISO-certified Safety Management System aligns with the International Safety Management Code (ISM), ensuring compliance with international and local laws through proactive risk management, monitoring, and reporting.

Key focus areas for SeaBird Exploration include:

• Improving Energy Efficiency: Implementing measures to enhance the energy efficiency of vessels, such as optimising speed to reduce fuel consumption.
• Reducing Waste and Emissions: Adopting practices to minimise waste and emissions, including waste reduction and recycling programs, utilising low sulphur fuel, and employing ballast water treatment systems to prevent the spread of invasive species.
• Supporting International Cooperation: Engaging in and supporting international cooperation initiatives, such as those led by the International Maritime Organisation (IMO), to develop and implement policies and regulations aimed at reducing the environmental impact of the shipping sector.
• Encouraging Sustainable Supply Chain Practices: Collaborating with suppliers and customers to promote sustainable supply chain practices, including efforts to reduce emissions from cargo handling and transportation.

Through proactive measures in these areas, SeaBird Exploration actively contributes to mitigating the impacts of climate change and aligns with the goals of SDG 13, showcasing its commitment to environmental sustainability within the shipping industry.

Depleted reservoirs can be used to store carbon dioxide through carbon capture and storage projects, and seismic surveys contributes to map potential areas. SeaBird Exploration contributed to an OBN/source project in Malaysia, which is expected to reduce carbon dioxide volumes emitted via flaring by 3.3 million tonnes of CO2 equivalent per year, making it one of the largest offshore CCS projects in the world.

Annual Report 2023

Environmental, Social, and Corporate Governance

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The shipping industry faces the imperative of managing emissions, discharges, and spills that could pose environmental and ecological hazards. These factors, if not handled with caution, can significantly impact air and water quality, as well as marine biodiversity. Recognising our

responsibility to protect the environment, SeaBird Exploration diligently monitors and manages these risks to safeguard both the environment and our organisation.

SeaBird Exploration faces potential risks related to discharges and spills, necessitating effective risk management for success in our business and the market. Thorough reviews of environmental threats enable us to develop robust safeguards. To minimise the environmental impact of our operations, we employ monitoring and management tools that comply with international and local legislation. Annual audits by the Classification Society, in alignment with the ISM Code and, where applicable, ISO9001 and 14001 standards, further validate our commitment to environmental responsibility.

Oil spills can have devastating and prolonged effects on ecosystems. Consequently, SeaBird Exploration has implemented preventive measures and procedures to mitigate the risk of oil spills. In 2023, we are proud to report zero oil or environmental spills, showcasing the effectiveness of our preventive measures. We adopt a proactive approach, ensuring all vessels have Shipboard Oil Pollution Emergency Plans (SOPEPs) and that our crews are trained to respond swiftly and effectively in emergencies. Regular SOPEP drills maintain the readiness of our teams and equipment.

By embracing these measures, SeaBird Exploration not only protects the environment but also ensures the long-term sustainability of our operations. We remain committed to continual improvement, striving towards a future with zero spills.

In the realm of ballast water management, which is crucial for ship stability, SeaBird Exploration acknowledges the potential ecological threats posed by the discharge of ballast water containing harmful aquatic species. To address this concern, we adhere to the International Maritime Organisation's (IMO) Ballast Water Management Convention, employing authorised Ballast Water Management Plans and Ballast Water Management Systems (BWMSs) on our ships. These measures align with international standards, ensuring the safe and responsible discharge of ballast water and reflecting our commitment to environmental stewardship.

Ghost nets and marine debris

Marine debris, particularly ghost nets resulting from abandoned, lost, or discarded fishing gear, poses a significant environmental concern. Ghost nets can persistently ensnare and harm marine animals and underwater equipment, making them a potential threat during seismic surveys. In addition to the environmental impact, ghost nets can jeopardise survey equipment, leading to potential damage or delays in the survey process.

To address this issue, Seabird Exploration actively tackles ghost nets and other marine debris encountered during surveys. These items are inadvertently brought to the surface during operations

and are carefully collected, stored on vessels, and subsequently disposed of in port. The entire process, including the recovery and disposal of debris, is meticulously logged within our safety management system.

In 2023, the Eagle Explorer has recorded over 44 instances of debris being retrieved and appropriately handed over for proper disposal. This commitment reflects our dedication to environmental responsibility and minimising the impact of our operations on marine ecosystems.

Furthermore, Seabird Exploration has implemented specific procedures and protocols to reduce the generation of marine debris during surveys. These include the proper disposal of any debris retrieved during the survey and the implementation of measures to secure and maintain equipment, minimising the risk of loss or breakage. These efforts contribute to our commitment to sustainable practices and the preservation of marine environments during our seismic survey operations.

Noise emissions

Seabird Exploration actively takes measures to mitigate the impact of acoustic noise generated by seismic vessels on marine animals, particularly in environmentally sensitive areas. The company has implemented specific operating protocols when navigating through such regions. To further ensure the protection of marine life, Seabird Exploration deploys protective species observers on board and utilises passive acoustic monitoring.

In the year 2023 alone, our commitment to environmental stewardship resulted in 57 instances where seismic surveys were temporarily halted due to the presence of protective species in the proximity of the project area. These measures underscore our dedication to responsible and sustainable practices that prioritise the well-being of marine ecosystems and wildlife.

4. Social performance

This section offers comprehensive insights into Seabird Exploration's labour practices, health and safety policies, and community engagement initiatives. Additionally, it outlines the