Poweralternatives: SeaEnergy gets off to good start in 2015 with first contract win in Canada

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Poweralternatives: SeaEnergy gets off to good start in 2015 with first contract win in Canada
SeaDragon has legacy oil and gas assets

By Amy McLellan

SeaEnergy is one of those companies that has been through many reinventions. The Aberdeen-based company started life as Ramco, the exploration and production company brought low by debt and the troubled Seven Heads gas field in the Celtic Sea.

As SeaEnergy it focused on renewable energy, specifically offshore wind. Come 2011 and there was another reinvention, when the renewables business was sold to Repsol and EDPR for £38.6 million.

The following year the AIM-listed company used its strengthened balance sheet to acquire visual asset management company Return to Scene for £5 million in upfront cash – plus another £4.6 million paid last year as R2S exceeded the earnings target included in the transaction – while still retaining some legacy oil and gas assets through its shareholding in Ramco spin-off, Lansdowne Oil & Gas.

Return To Scene (R2S), which started life helping police forces and courts model crime scenes before spotting the substantial opportunity in the offshore sector, is now the heart of the SeaEnergy business.

The innovative R2S visual asset management system provides high definition 360° spherical photography – and it also has a partnership with an aerial photography service – that photographically captures offshore oil and gas assets and provides the user with a desk top visual, interactive walk around.

This 3D modelling of oil & gas installations is linked to asset management databases to allow major oil companies to improve the performance of their assets whilst providing operational efficiencies.

This service helps operators reduce costs, minimise unproductive bedspace usage and optimise operational planning and safety. Operators can, for example, plan maintenance work prior to arriving on site, thereby reducing travel costs and allow more effective use of on-site time.

The system has been used by 16 operators on the UKCS, the Gulf of Mexico and Mexico. Last month the £13.5 million market cap company won its first contract, worth US$800,000, in Canada, adding what it calls another “very high quality name” to the client list, which now includes four of the five supermajors.

R2S is the main engine of growth for the Aberdeen company, with the division achieving record turnover last year and there’s already a strong order book for the first half of 2015.

As yet, the rout in the oil price hasn’t dented appetite for the service, with SeaEnergy reporting “high” demand from operators in the UK North Sea, US and Mexico as well as enquiries from international markets in Southeast Asia and the Middle East. This is because R2S can realise very significant cost savings for operators and, equally potent in a low oil price environment, can be used a tool to plan decommissioning projects.

“Whilst we are alert to potential impacts on our pipeline of business, we have to date not seen any oil price related project cancellations or deferrals and have continued to receive new enquires and firm orders for operators already in cost -cutting mode,” the company reported last week.

There are other strands to the business. The company’s consulting division helps clients make the best use of their wealth of complex data. This is not just offshore oil and gas work but also sensitive visual reconstruction/analysis work for the Hillsborough Inquiry.

The company’s ship management division manages three vessels in Asia and is seeking additional vessel management opportunities to improve profitability. It is also tendering for contracts for its specialist offshore wind farm vessel designs.

The company’s legacy shareholding in Lansdowne has been declining, as shares in the AIM small cap remain under pressure because of the time taken to find a partner to help advance its flagship project,the Barryroe oilfield in the Celtic Sea. SeaEnergy has warned this could lead to an impairment in its carrying value for this asset. Further ahead it hopes to exit this legacy investment once Lansdowne’s share price recovers, an event that awaits news of the Barryroe farm-out.

Shares in SeaEnergy have recovered from recent lows and are trading at 24 pence per share.

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