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Dolphin - aiming for 9 per cent seismic market share

Thursday, July 11, 2013

Dolphin Geophysical, a Bergen seismic survey company establishedin2010, believes it already has 5per cent of the offshore seismic survey market - and expects to have 9 per cent in 2014.

It has grown from 2 employees in December 2010 to over 300 now.

The company says it is growing market share on the basis of having some of the most technologically advanced and newest seismic vessels in the market - and also by offering both seismic survey and offshore processing services.

The company was founded just 3 years ago, in 2010, when there was 'not much interest in seismic', says Atle Jacobsen, CEO of Dolphin Geophysical.

It attracted $65m of investment capital from 2600 different shareholders on the Norwegian Stock exchange.

The vessels were acquired separately by seismic vessel operator G C Rieber Shipping, which also owns the vessels.

It operates 4 seismic vessels. 2 high end (large) 3D vessels, 1 mid size 3D and 1 ice class 2D vessel, all of which were built between May 2011 and April 2012.

There are a further 4 high end 3D vessels to be delivered between the second quarter of 2013 and the first quarter of 2015. The 'Super Duke' vessel, to be delivered in 2015, will be 'amongst the highest capacity seismic vessel in the world,' Mr Jacobsen says, with 22 streamers recording 3D seismic.

With the seismic business being high risk, you are better off funding your business by selling shares rather than taking loans, Mr Jacobsen says.

The company gathered together a group of experienced seismic executives to run the company.

As the seismic market has gradually improved in the past 3 years, the company has found itself with vessels which are in high demand.

The company is focussing operations geographically on the Barents Sea, the central North Sea and West Africa.

The company believes that there should be room for more players in the seismic survey industry, because it is very consolidated. '5 big players have 70 per cent of the market,' he says.
Mr Jacobsen believes that the rates for seismic surveys will grow 8 to 10 per cent a year over the next few years. 'All of this fuelled by the oil price,' he said. 'Our view is oil price has now stabilised north of $100. Seismic [survey rates] are always a mirror image of the oil price.'

However he does not believe any other company will have the budget to compete with willingness to invest in new vessels today. 'You'd need $500m cash,' he said.

The company wants to achieve profitability by securing follow on contracts, where a vessel follows up one seismic survey with a second one in the same area, so the vessels spend less time moving to new seismic locations.

Doing processing as well

Unlike most seismic survey companies, Dolphin does its own seismic data processing.

This enables the company to have a point of differentiation with seismic survey companies which have similar survey technology, says Gareth Williams, Chief Geophysicist of Dolphin.

It purchased Open Geophysical, a seismic processing software company.

'It is the only seismic processing package written and designed in the 21st century,' Mr Williams says.

'We have none of those legacy problems [with old software] and it gives us control of the source code.'

The company employs 3 or 4 staff working on board all of its the vessels, processing data and doing seismic quality control.

They work 5 weeks on, 5 weeks off - and 5 weeks gives them time for a good holiday.

Since the work is usually outside territorial waters it does not usually attract tax.

Offshore geophysicists are typically about 5 years out of university.

Mr Williams says it has often proven easier to find staff willing to do seismic processing offshore, than find geophysics staff to work in the office. 'It is relatively easy to hire people to work offshore,' Mr Williams says.



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