SBX Seabright Holdings, Inc.

18 August, Limassol, Cyprus

2015 SUMMARY OBSERVATIONS FOR THE SECOND QUARTER

• Revenues for the quarter were $19.6 million, a decrease of 56% compared to Q2 2014 and down 19% relative to Q1 2015.
• Contract revenues for the period were $18.8 million, down 54% from Q2 2014 and a decrease of 18% from Q1 2015.
• Multi-client revenues were $0.7 million, down 80% from $3.7 million reported in Q2 2014 and a decrease of 40% from $1.2 million reported in Q1 2015.
• EBITDA was negative $6.5 million compared to $12.6 million for Q2 2014 and $8.2 million for Q1 2015.
• EBIT for the quarter was negative $15.7 million compared to negative $2.6 million for Q2 2014 and positive $3.7 million for Q1 2015.
• Vessel utilization for the period was 68.1%. Contract surveys during the second quarter represented 68.1% of vessel capacity compared to 58.4% during the first quarter 2015. None of the company's vessels were utilized for multi-client surveys during the period, similar to Q1 2015.
• Mexico Gigante survey commenced at the end of the quarter. Expect to have approximately four vessels employed on the project.
• Zero lost time injury frequency (LTIF) in the quarter.
• 1.94% technical downtime in the quarter compared to 6.09% Q2 2014.
• Conversion of 6,015,693 preference shares and 1,769,375 warrants into 3,007,846,500 common shares and 884,687,500 warrants on common shares.
• Non-recurring SG&A costs in the period of $2.2 million relating to bad debt provisions. Multi-client library impairments were $3.5 million during the quarter while seismic equipment impairments were $0.6 million. Restructuring charges on onerous long-term lease contracts amounted to $8.1 million.

Key highlights

Operational review

The second quarter was characterized by low oil prices and a weak market sentiment for oil exploration. Seismic tender activity has been substantially impacted and price competition has intensified. Furthermore, the 2D/source market has continued to experience significant competition from multi-streamer 3D vessels. The negative market sentiment has exacerbated industry risk factors and increased the uncertainty related to timing of a market recovery.

Revenues for the quarter were reduced due to project delays and the continued softness in seismic market demand. In light of challenging market conditions, the company decided to stack Munin Explorer. This capacity reduction is in addition to the lay-up of Voyager Explorer and Geo Pacific, which were cold stacked during Q4 2014 and Q1 2015, respectively.

The company continued its cost reduction effort. The office relocation from Dubai is completed and run-rate SG&A is currently in line with initial targets. Operating expenses have been reduced relative to plan estimates and the company has initiated measures to realize permanent cost savings as indicated in the previously communicated savings initiative. Capital expenditures have been reduced relative to the investment plan. This reduction is the result of capital expenditure postponements due to lay-ups as well as savings initiatives. The company is continuing its efforts to review and implement further cost savings. In addition to cost reductions, the company is actively focusing on cost flexibility measures as well as improving operational efficiency.

Vessel utilization was 68% during Q2 2015, up from 58% in the previous quarter. Technical downtime for the fleet was less than 2%, down from 5% for Q1 2015. Q2 yard stay represented 13% of vessel capacity. Contract surveys represented 68% of vessel capacity compared to 58% for the first quarter of 2015.

Aquila Explorer completed its Australasia project, and then undertook a short 2D survey in South East Asia before entering dry-dock in Singapore for planned maintenance. Thereafter, the vessel mobilized for a source project in the region. Harrier Explorer also entered a scheduled dry-docking and completed a source contract in South East Asia towards the end of the quarter. Munin Explorer continued its long-term source contract in South America throughout the quarter. Hawk Explorer mobilized to the Gulf of Mexico during the first half of the quarter and completed a short 2D survey before commencing the TGS Gigante project in Mexico. Osprey Explorer completed two projects in the Gulf of Mexico and mobilized to the TGS Gigante project at the end of the quarter. Northern Explorer completed a scheduled maintenance docking in Las Palmas and was in transit to Mexico towards the end of the quarter. Geo Pacific and Voyager remained cold-stacked during the quarter. As part of an effort to reduce costs and optimize fleet utilization, the company also made a decision to lay-up the Munin Explorer subsequent to quarter closing.

Multi-client surveys represented 0% of vessel utilization in the quarter compared to 12.5% in the same quarter previous year. Multi-client revenues were $0.7 million in the period. An impairment of $3.1 million was charged to the 3D multi-client survey in West Africa. Reduced revenue forecasts from selected 2D multi-client surveys triggered an additional impairment of $0.3 million during the quarter.

During the quarter, the company's costs were reduced. The lay-up of 3D vessels, reduced operating expenses, lower project activity, reduced vessel charter rates and lower crew headcount contributed to bring down costs of sales relative to 2014 and Q1 2015.

During the quarter, the company deferred $2.2 million in mobilization costs on the TGS Gigante project.

Non-recurring SG&A costs in the period amounted to $2.2 million, which relate to bad debt charges on receivables. The company incurred extraordinary operational restructuring charges of $8.1 million related to lay-up costs and onerous contracts charges on leased vessels (see selected notes and disclosure section for further details). Non-recurring multi-client impairments were $3.5 million, while seismic equipment on the Munin Explorer was impaired with $0.6 million. Total extraordinary non-recurring charges amounted to $14.4 million during the quarter.

Lost Time Injury Frequency (LTIF) rate for the quarter was zero. Industry-leading HSSEQ processes continue to ensure that the company provides a safe and healthy work environment both offshore and onshore while continuously improving operational performance and quality. ISM / ISO 9001 and 14001 recertification audits by DNV passed with zero non-conformities or observations. The FPAL audit was passed with an improved result compared to 2013.

Regional review

Asia Pacific (APAC) and North and South America (NSA) remained the most active regions during the second quarter.

Sales in APAC of $9.4 million, a decrease of 11% from the previous period, accounted for 48% of total revenues for the quarter. Aquila Explorer and Harrier Explorer completed four different contracts in the region during the period.

NSA revenues of $9.4 million represented 48% of total revenues for the quarter. Sales in this region increased slightly with Munin Explorer, Osprey Explorer and Hawk Explorer completing multiple contract surveys during the quarter. Increased revenues from this region is expected in the future as a result of the commencement of the Mexico Gigante survey. Osprey Explorer, Hawk Explorer and Northern Explorer operation on this project before and just after the end of the quarter. Harrier Explorer is scheduled to start on the project during the third quarter.

Sales in Europe, Africa and the Middle East (EAME) accounted for of $0.7 million or 4% of total revenues. No SeaBird vessels were working in the region during the period, and the revenues recorded consist of multi-client late sales.

Outlook

Global seismic market demand continued to show weakness in the second quarter. The reduced capital spending in the sector has materially lowered seismic industry activity and delayed or cancelled survey start-ups and awards. We expect the market to remain challenging in the intermediate term.

A high proportion of the company's fleet is expected to be employed on the Mexico Gigante project until mid-2016. The current market uncertainty makes it difficult to predict the level of contract coverage that is possible to obtain beyond the company's current backlog.

Financial review

Financial comparison

All figures below relate to continuing operations unless otherwise stated. For discontinued operations, see note 1. The company reports a net loss of $16.8 million for Q2 2015 (net loss of $7.9 million in the same period in 2014).

Revenues were $19.6 million in Q2 2015 ($44.7 million). The decreased revenues are primarily due to reduced number of vessels in operation and lower multi-client activity during the period.

Revenues for first half of 2015 were $43.8 million ($78.4 million).

Cost of sales was $20.0 million in Q2 2015 ($28.4 million). The decrease is predominantly due to fewer vessels in operation as the Geo Pacific and Voyager Explorer are laid up, lower operating expenses, reduced charter hire and lower fuel cost partially offset by a $8.1 million non-recurring restructuring charge for onerous long-term lease contracts.

For the first half of 2015, cost of sales amounted to $37.0 million, down from $48.1 million for same period during 2014.

SG&A was $6.1 million in Q2 2015, up from $5.1 million in Q2 2014. The increase is principally due to one-off bad debt expenses on long-dated receivables, offset by savings related to the closing of the Dubai office and reduced onshore headcount.

SG&A for first half of 2015 were $9.9 million ($10.0 million).

Other income (expense) was nil in Q2 2015 ($1.3 million).

Other income (expense) for the first half was $0.1 million ($2.4 million).

Restructuring gain on leases was nil in Q2 2015 (nil).

Restructuring gain on leases for the first half of $4.7 million (nil) as a result of negotiated debt forgiveness as a part of the company's financial restructuring that was completed during Q1 2015.

EBITDA was negative $6.5 million in Q2 2015 ($12.6 million).

EBITDA for first half of 2015 was $1.7 million ($22.7 million).

Depreciation, amortization and impairment were $9.2 million in Q2 2015 ($15.2 million). This decrease is largely due to lower vessel book values, and lower multi-client impairments.

For the first half of 2015, depreciation amortization and impairment were $13.7 million compared to $22.9 million for same period of 2014.

Finance expense was $1.3 million in Q2 2015 ($3.6 million). The decrease is due to reduced debt levels resulting from the recent restructuring.

For the first half of 2015 finance expense was $2.3 million ($6.6 million).

Other financial items was positive $0.1 million in Q2 2015 (negative $0.9 million).

For the first half of 2015, other financial items were negative $0.1 million (negative $0.7 million).

Restructuring gain of positive $0.4 million in Q2 2015 (nil) as a result of final adjustments to the costs related to the company's financial restructuring.

For first half of 2015 restructuring gain was $61.7 million (nil).

Income tax expense was $0.3 million in Q2 2015 ($0.8 million).

For the first half of 2015 income tax expense was $0.8 million ($1.0 million).

Capital expenditures in the quarter were $3.1 million ($3.3 million).

Multi-client investment was $0.2 million in Q2 2015 ($7.9 million).

Liquidity and financing

Cash and cash equivalents at the end of the period were $7.4 million ($12.6 million), of which $0.4 million was restricted in connection with deposits and tax. Net cash from operating activities was negative $4.1 million in Q2 2015 ($13.2 million).

The company has one bond loan, one secured credit facility, one unsecured note and the Hawk Explorer finance lease.

The SBX04 secured bond loan is recognized in the books at amortized cost of $25.5 million per Q2 2015 (nominal value of $29.3 plus accrued interest of $0.2 million less fair value adjustment of $4.0 million). This bond has been issued in two tranches; tranche A amounting to $5.0 million and tranche B amounting to $24.3 million. The SBX04 bond tranche A is carrying an interest rate of 12.0% and Tranche B is carrying an interest rate of 6.0%. Interest is paid quarterly with first interest instalment paid on 3 June 2015. The bond's stated maturity is 3 March 2018 and has principal amortization due in quarterly instalments of $2.0 million starting at 3 June 2017 with a balloon repayment to be made at maturity. Interest paid during Q2 2015 was $0.5 million.

The three year secured credit facility is recognized at amortized cost of $2.0 million (initial nominal value of $2.4 million). Coupon interest rate is 6%. Interest is to be paid quarterly, and the first instalment was paid on 3 June 2015. The facility's stated maturity date is 3 March 2018 and has principal amortization due in quarterly instalments of $0.2 million starting on 3 June 2017 with a balloon repayment to be made at maturity. Effective interest booked for Q2 2015 was $0.1 million. Principal repayments during Q2 2015 amounted to $0.9 million and additional amounts drawn on the credit facility during the period was $0.9 million. Interest paid during Q2 2015 was $0.03 million.

The three year unsecured loan is recognized at amortized cost of $1.9 million (initial nominal value of $2.1 million). Coupon interest rate is 6% . Stated maturity date is on 1 January 2018. Interest is paid quarterly in arrears, and the first payment was due on 1 April 2015. The principal will be repayable in nine equal instalments of $0.2 million commencing on 1 January 2016. Interest paid during Q2 2015 was $0.03 million.

The lease of Hawk Explorer is recognized in the books as a finance lease at $4.3 million per Q2 2015. Instalments and interest amounting to $0.6 million were paid during Q2 2015 ($1.3 million in Q1 2014).

Net interest bearing debt was $26.4 million as at the end of Q2 2015 ($85.2 million in Q2 2014).

Accrued interest on the bond loan and credit facilities for Q2 2015 was $0.2 million ($0.3 million).

The company was in compliance with all covenants as of 30 June 2015.

As a part of the recent final restructuring, the company issued 6,015,693 preference shares and 1,769,375 warrants. During the quarter, the preference shares and warrants were converted into 3,007,846,500 common shares and 884,687,500 warrants. Post conversion of the preference shares, the total outstanding amount of common shares in the company is 3,065,427,746. The company has also issued 884,687,500 warrants, convertible into 884,687,500 ordinary shares. The warrants are listed on the Oslo Stock Exchange with ticker SBX J.

The company's accounts have been prepared on the basis of a going concern assumption. In the view of the board of directors, the current challenging market conditions and the company's limited working capital creates a material risk to this assumption. Based on the backlog and financial forecast, the board believes the company will generate sufficient levels of liquidity to operate in the near term. In the event that project performance is significantly worse than expected, contracts and other arrangements in respect of the employment of SeaBird's vessels are cancelled, or significantly delayed, new backlog cannot be secured on satisfactory rates or at all, the company would need to sell assets or raise additional financing. Reference is made to the Going Concern section in selected notes and disclosures and the recently issued prospectus for further details on the current financial position of the company.

Important events in the first half of the year

During the first half of 2015, the company completed a restructuring which reduced financial indebtedness and obtained additional funding. Please refer to the recently published prospectus for further details on the transaction.

The company commenced operations on the Mexico Gigante 2D survey with TGS-NOPEC Geophysical Company during the first half of 2015.

On 7 May 2015, a new board of directors was elected. The current board is chaired by Ms. Annette Malm Justad.

Responsibility statement

We confirm that, to the best of our knowledge, the condensed set of financial statements for the first half year of 2015, which have been prepared in accordance with IAS 34 "Interim Financial Reporting", gives a true and fair view of the company's consolidated assets, liabilities, financial position and results of operations. We also confirm that, to the best of our knowledge, the first half 2015 report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the condensed financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year and major related parties transactions.

The Board of Directors and

Chief Executive Officer

SeaBird Exploration Plc

17 August 2015

The second quarter 2015 presentation will be transmitted live at

http://www.sbexp.com/investor-relations.aspx.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

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