SeaBird Exploration Plc (SBX) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to this first quarter conference call for Green Energy Group. My name is Ståle Rodahl, I'm the Executive Chairman of the Group, and I'm here or at different locations then with Finn Atle Hamre, our CEO; Ståle Monstad, CEO for Green Minerals; and Erik von Krogh, which is our CFO. Agenda today, as usual, we go through some highlights. We'll have a review of the seismic operation, the same with the minerals operation, and we'll have a Q&A in the end. Before we do that, just stating the market value by business area, Green Minerals as a listed company, NOK 79 million by the end of the quarter. And derived from that an implicit pricing of SeaBird of NOK 114 million, slightly more than $10 million and NOK 193 million market value for the group then. We announced on the 26th of January that we had initiated a strategic review to explore all available options to maximize shareholder value for the seismic operation. This was after having announced last year in the first half that we wanted to explore various avenues to help consolidate, in particular, the OBN segment of the seismic market. And further to that then, we announced on the 28th of April that we had entered into a letter of intent regarding a sale of the company's seismic operation. We have signed a letter of intent for an exclusivity for a due diligence for a determined period of time. The acquisition, if conducted, is a 100% acquisition of the company or all the seismic activities. And the purchase price has been agreed to $53 billion (sic) [ $53 million ] on a cash and debt-free basis with an agreed level of working capital then. The transaction is dependent on the successful conclusion of due diligence. And there can, of course, be no assurance at this point that a transaction will materialize. Furthermore, we have said that we will update on any significant developments in this process. And at this juncture, this announcement is the information that we can give. So no further information will be given in this conference call. Highlights for the quarter, revenue is up from $3.7 million to $5 million year-on-year and the EBITDA improvement from $0.5 million loss to $0.5 million profit year-on-year. Still low fleet utilization of 28%. We'll get back to that. Equity ratio of 43%. We are reporting a net asset value after having increased the number of shares during the quarter then of NOK 7.2. Major events, I already talked about strategic review. Other than that, very pleased to see Fulmar off to the -- to its first contract of 90 days. We completed importantly our first marine minerals cruise. And we have initiated a key mineralogy project for -- in the Marine Minerals. This is a world first. Further, we released an industry leader framework for sustainability in Marine Minerals. And this is something that we aim to develop further together with authorities and the industry. But we are first there with a substantiated framework. And lastly, we raised $3.6 million in a private placement and $0.8 million in a subsequent offering after the quarter end. When it comes to the key numbers, EBITDA improvement, as I said, from $0.5 million negative to $0.2 million positive, and we see further meaningful improvement in the EBITDA number from the second half 2022. We'll touch upon that as well. Net asset value, up from $34 million to $40 million at the end of the first quarter. Looking at this per segment, we see that the seismic operation improved by almost $1 million then to a positive number of $0.6 million and minerals EBITDA is negative with $0.5 million. And the net asset value as we calculated based on book values for the seismic operation and market values for the minerals operation is estimated then to $40 million by the end of the quarter, NOK 7.2 per share and with a book ratio of 43%. The composition here on the gross asset value, we see that the seismic operation constitutes around NOK 600 million out of a total NOK 700 million gross value and with a net value around NOK 350 million. And with that, I hand it over to Finn Atle and Erik to go through the seismic operations.

Thank you, Ståle. Yes. We start with this slide showing the company's fleet, which, as you can see, is unchanged with the 3 owned vessels. And in addition, we have equipment that can be installed on third-party vessels if required. Next please. Utilization in the quarter was 28%. And this includes the 2D job for Eagle that was completed in late February. And in addition, we had a couple of weeks with mobilization of the Fulmar Explorer at the end of the quarter, while the Petrel Explorer was idle throughout the quarter. Yes, this figure shows the quarterly revenues and EBITDA and also the underlying trends. And as you can see, we reached the bottom around the first quarter of 2021. And since then, we have seen improvement both in revenues and EBITDA, and we expect this trend to continue going forward.

Yes, operational updates. Eagle Explorer completed the 2D job in India at the end of February. And also, keep in mind that when we came into this quarter, we had strong commitments for 2 [indiscernible] boats that were supposed to -- starting job in April. That was later canceled. We also secured further work for the region to bring a direct continuation of the completion of the work in India -- for more work in India. As a direct consequence of world events between Ukraine and Russia that contract was unfortunately also canceled. So Eagle is now, due to that, remains in India for strategic positioning reasons. I'll get back to that more when we're looking at the market trends. Petrel is idle. Fulmar, we secured a contract for the Fulmar in late February, early March, that from which she started mobilizing from [indiscernible] in Egypt. And the contract [indiscernible] -- in the middle of April and is performing well on our first project. Next one, please? Market trends. We see well tendering activity continues on the same path as before. World events have -- give -- sort of strong oil price still. The COVID situation seems to be returning to normality. And also from world events, we see that oil and gas continues -- improves the importance of oil and gas in general oil energy mix, which is sort of also -- sort of indicating a strong market going forward. And also that sort of the direct consequence on oil and gas companies focused on increased oil recovery on producing fees, however. We also see the geopolitical situation with a high oil price, sort of indicating more interest for explorational-type seismic with the current tender going on in India for a substantial amount of work. One comment on the diagram. It's not year-to-date on the last block, that's the quarter-to-date. So we see we are in the middle of the quarter. So we expect the amount of tonnage coming in over the quarter being similar to what we've seen in previous quarters. And also what noting that -- worth noting that is sort of tendering activity and also some of the, note, companies are bundling together some of the projects looking for a longer period contracts with source operators bundling together several projects. So that has a tendency to reduce the number of tenders, but [indiscernible] tenders coming in with little longer duration. So that's a positive indicator for us.

Excellent. All right. So still, still positive tendering activity. And as Finn Atle said, somewhat different or somewhat longer tenders and so more value per tender offer. This slide, we showed the first time in March in the presentation that we held then. And -- as you know, we have -- or at least since we changed the Board here 2.5 years ago, we have been very careful saying that we don't want to guide because visibility has been low. And it's a bit the nature of the industry with short duration contracts and not much time between awards and start-up of the projects. So it's been characterized by very low visibility, and we have been busy guiding on our cost cuts and our restructuring and not so much the market or contracts going forward. We changed that for the first time in the second quarter last year when we dare to say or we dare to guide that we thought that the second quarter would be the low point in the cycle for the company and that we would see improving numbers going forward. That has held true since then. And in March, we upped the ante somewhat in terms of our guiding simply because we now have the necessary visibility to share information with you in terms of what we see. And this slide then reflects that. And what it says then, if you go to market KPIs, what we're showing here is the level of rates or the level of earnings at the last peak of the last cycle high, which was 2013, we're showing the trough in 2020 and the improvement since then. At the last cycle, a high-end OBN vessel, we've taken around $85,000 per day, assuming an utilization of 80% that will give an annual EBITDA for such a vessel of around $20 million. At the low point, this EBITDA was a meager $2 million. It improved last year to around $5 million on the $40,000 rate and 60% assumed utilization. And we said that in March that we see rates up marching upwards towards $60,000 for fixtures done in the second half of 2022, and we think utilization then will continue to improve up to old cycle highs, around 80%. I can say that we got some pushback on this guidance that we gave in March in terms of EBITDA potential per OBN vessel in the double-digit million dollars. I'm therefore very pleased to say that I think we are already there. The mix of rates and utilization might be a little bit different, but that is not significant. What is significant is that the combination of rates and utilization to us, it seems to already on fixtures that we think will be announced in the near future. We think that the combination of rates and utilization are -- support the indications of double-digit EBITDA on the OBN side. And that ties back to what Finn Atle said about that slightly changed nature of the contracts being awarded. So we are very, very pleased to see that. So the improvement is from $2 million. There is than more than a quintupling of the annual EBITDA level from the trough already. Now when it comes to SeaBird, the way we have tried to position SeaBird for this. If you go back to 2020, we had a number of vessels. We had more vessels than we have today, but we didn't have many EBITDA contributors. As you know, we have worked hard on the fleet. We've been scrapping. We've been high-grading. And also, we have been consolidating as much as we thought we could of the OBN market. In 2021, that led us to have actually only 1 vessel for OBN and 1 for 2D, ready to operate. But at this juncture, with the work that we have done over the last couple of years, we are now in a position where we have, as you know, 2 vessels that are fully owned and operating, but we also have equipment to outfit 3 additional vessels. So we can outfit 2 2D vessels and we can outfit 3 OBN vessels. So a total of 5 vessels. So this is the -- this is the result of the asset-light strategy that we have been talking about. We have taken down the amount of assets that the company owns and the costs related to those. We have taken down the fixed cost level of the company substantially. But at the same time, we have increased the leverage that this company has on the OBN and the 2D market. We are very pleased with that. And then the question is, well, having done that and having this capacity and then talking about a tight market and showing these rates that we do, how can we only have 1 vessel on contract? The answer to that is that we are -- we -- I guess, we can say we are sorry that we weren't able to show and to actually execute on all the contracts that we landed for the second quarter. If you go back to -- if you go 8 months back in time, you will see that we have announced contracts that initially gave us 4 vessels on operation in the second quarter. That was Fulmar, that was Eagle and that was 2 more vessels. So the contracts that we announced during these months already gave us an 80% utilization on the 5 vessels, 5-vessel total capacity that we're talking about. Then we had 1 contract canceled directly as a consequence of the rationale in Ukraine. We have 1 contract canceled indirectly as a consequence of it. And then 1 more cancellation. So ending up with only 1 vessel for the second quarter. Unfortunately, this business is not like, how should we say, the shipping business or the OSV business in terms of a high number of vessels and a high number of contracts being awarded. So with the cancellations that we had, we can't turn around easily and replace those contracts with others. So that is a real pity, but we had lined up the business for 4 contracts in the second quarter, which would have given you some visibility on the earnings power of this strategy and this company at the moment. So -- but we are, of course, digging our hires in. We know that the strategy works. We -- and we can't imagine that we will see this type of situation and cancellations going forward. So we are still pursuing a strategy, and we are confident that we will be able to deliver, in particular, helped by the good market as well. We will be able to deliver on this going forward. So yes, that's, I guess, all we wanted to comment there. And just on valuation, historically, asset heavy oil service company had 6 to 8x EBITDA over the cycle. And the seismic operation implicitly in GEG now is priced at around $10 million. Another way to look at this is to look at the implied vessel value for a high-end OBN vessel, and then assuming a $75 million new build cost. The implied value now on the GEG share price of around NOK 4 is no more than $10 million. Straight-line depreciation would indicate a fair value of $35 million for such a vessel. And if we use an NPV 15% calculation, on that same vessel, the fair value would be north of $60 million. And that's that for seismic. Now we'll hand it over to Ståle Monstad for update on the minerals business.

Thank you very much, Ståle. The first slide capture. So the vision of Green Minerals. We aim to be a deep-sea mineral company that covers the entire value chain, everything, from exploration to production and transport and processing onshore. And the highlights for the first quarter of '22, we have just completed the first research cruise. And I must say, with a very promising preliminary results from that cruise -- we are still developing a very comprehensive exploration framework that will be put in, in action when the Norwegian sector opens up in a year from now. And also, we have launched a very comprehensive ESG reporting framework. I will come back a bit more on that later. And as Ståle mentioned, we have initiated a key mineralogy study that is the first of its kind, and it's important to sort of link the offshore part of the industry to the onshore part. When it comes to key financials for the first quarter, the operating expenses in the first quarter of 2022 includes a noncash expense of NOK 2.4 million, which is related to employee option scheme. And the total number for the first quarter is down just above NOK 4 million. But the expected burn rate going forward for each quarter will be in the order of NOK 1.7 million. The company's debt free and the cash balance was NOK 17 million at the end of the first quarter. And we remain fully funded for all planned activities going forward. Our strategic priorities remain unchanged. We will be a full life-cycle operation in Norway. That is the main focus. The Norwegian government is steadily working towards the opening in 2023. And we maintained and will maintain a pole position in marine mineral sphere on the Norwegian sector. We are also looking at international opportunities and actively working towards some of these. We view both the seafloor massive sulfides, which is the main focus in Norway. And also nodules, which is the main target in the Pacific as attractive opportunities. And we are open to enter into alliances and partnerships also internationally. This road map is explaining the way until production. And as you can see, the first 3 sort of boxes have been ticked off and everything is progressing according to plan. The authorities and everyone working from the authority side on the deep-sea mineral industry is ensuring us that everything is progressing as planned. And the decision on opening will be taken in the second or third quarter of 2023 in the Norwegian parliament. And then we expect things to progress quite rapidly forward with licensing round and application and awards, hopefully, in the beginning of 2024. So this plan has been the same for more than a year, and there's no signs or any indications that it will slide. It's a high and good pace from the Norwegian authorities on this matter. On key milestones that we announced before the year started, the first 1 was the research cruise, which has been completed. The results from that cruise was very promising. It's still preliminary results. We need to do more analysis in the laboratory. But the coring came up with very promising ore grades on copper and also a bit unexpected quite a high ore grade of nickel in these [indiscernible] complex seafloor massive sulfides that we assembled in the Mid-Atlantic. We expect these deposits to be very similar to what we targeted in the Norwegian sector. And it's very encouraged, at least what we find, this high nickel content, which is also a very important and critical mineral for batteries and green shift in general. We also have -- like we mentioned a bit earlier, started a study on seafloor massive sulfide samples. The reason we're doing this is to make sure that we have everything we need in order to start processing this material once we retrieve it or dig it up from the deep sea. It has not been done before, so we need to make sure that everything we take to shore can be processed in existing processing plants onshore. That's -- it's a twofold reason for that. One is the commercial. You don't have to build a new one. And the other is, of course, the time it takes to build a new processing plant. So this is a very important study -- and it's to draw a knowledge, the first of its kind in the world. Thirdly, the Norwegian Petroleum Directorate will have a seminar in June, early June. And in that seminar, they plan to release all the data they have gathered through the 5 years of work on the Mohns Ridge and the Knipovich Ridge offshore Norway. And this is quite unique to Norway and the value of this data is approximately NOK 200 million to NOK 250 million. And all this data will be given to us at copying cost. So this is, like I said, a unique thing in Norway that the data acquired by the authorities are shared with companies that are active in the industry and in the region. And in addition, we continue to work hard on partnership and to create good partnerships for the entire value chain. The ESG report or a framework, we released together with the annual report. It has been very well received by everyone has read it. We have also been discussing this with the authorities, and we will continue to work with the authorities on this matter, which is an extremely important matter to Green Minerals. And we believe that this is a really an ESG framework for the entire industry that we have produced here in Green Minerals. So we're quite proud of it, and we're going to continue working on that matter. We still believe that the environmental footprint of deep-sea mining will be considerably lower than the equivalent mining onshore, which is also a very important aspect to bring forward to authorities and to the public. And in addition, the geopolitical situation is also sort of telling us that having our own value chain of minerals, critical minerals for the green shift for the defense industry and in general, is an important thing to establish. A bit short on copper, which is the main metal that we expect to find in the sea from massive sulfides. The peak copper is expected to hit the world in a year or 2 from now and the gap between what is needed for the green shift and what is planned and produced onshore is increasing. The onshore grade is decreasing everywhere. This is a slide from Chile, which is the main producer of copper in the world, and the onshore grade there now is below 0.8%, which means that less than 1% of all the rocks that you excavate from mine onshore is actually copper. In contrast, the results from the Mohns Ridge and all the samples taken on the [ Fulmar ] discovery out there, these samples are taken from -- by the University of Bergen and the NPD. In these samples, the average copper ore grade is 5.6%. So it's almost 10x higher than what you have on average, onshore, Chile. So the ore that we expect to extract from the Norwegian sector is going to be a super ore. It's going to be a much, much higher grade than what we see in onshore. That's also important when it comes to waste and tailings from processing. Our aspirational targets. We have -- we did plan for 2 research cruises. One is completed. We are going to have the next 1 next year in the cruise season. And we are still seeking exploration license in international waters, either alone or through partnerships? We still are -- have a plan to have the first pilot system ready for operations by 2026. We want to process all the ore we produce in the Nordic countries, both from a commercial and also from an environmental point of view, less transportation and less CO2 emission. And we will keep our focus on ESG and subsea ecosystems and biodiversity in all our efforts to develop this industry. And the revenue is, as we see it, also quite healthy and promising for this new industry, as you can see on the right-hand side here. I think that is also -- I hand it back to you.

All right. Thank you. And just a summary then of what we're going through today, NAV reported then at NOK 7.2 per share by the end of the first quarter. We launched a strategic review of the seismic operation in January, and we signed a letter of intent for sale of SeaBird in April. The Fulmar is on contract and performing according to the expectations that we had on the high-end OBN; vessel. Demand for OBN and 2D seismic is improving amidst reduced supply. And we have conducted the first research cruise for Green Minerals and we have launched an industry-leading framework for the sustainability issues here. Outlook for the Marine Minerals and the Seismic operation remains positive. And we expect a meaningful improvement in our EBITDA numbers from -- yes, as of the [ second ] half 2022. Lastly then, why invest in Green Energy Group. The company has a leading position in Marine Minerals on the Norwegian continental shelf. This is a new mid-billion-dollar industry in the making, and we are frontrunners for that. It's a minerals company aspiring to help unlock the most serious bottleneck threatening the investment of the green energy transition. It is the Green Energy Group through SBX gives you exposure to the only niche in the seismic industry, benefiting from the change in spending from greenfield exploration to in and near field. And it is an agile seismic company, which we have proven the last 2.5 years with an industry-leading and flexible cost base and proven ability to cut costs early in downturns and ramp early when markets improve. Furthermore, the group capitalizes on an entrepreneurial culture and spirit in combination with Marine Minerals and energy market know-how, and we're backed by 6,500 shareholders. And -- last but not least, we run a return-focused business model with emphasis on capital efficiency and a lean organization. The company is managed by shareholders for the benefit of all shareholders. And that concludes the prepared presentation. And then we hand it over to the Q&A. Are there any questions that's come in.

Yes, there are some questions. The first 1 is what is the plan going forward if you sell the seismic activity? And why sell the seismic activity given the upturn you are seeing in the seismic market?

Right. Well, that's a good question. So let me start with the latter half of it. Why sell the seismic activity in an upswing. If you go back to what we started with last year, we have strongly voiced an interest in consolidating in particular, the OBN segment of the seismic market. We think that makes a lot of sense if you look at the industry structure of that segment. And that is the case, whether the market is at a low or a high point. We think the players in this segment will benefit from that. So this is something that we've been working hard on for many months. And the offer that is on the table is simply the best way we think, to continue to run SeaBird going forward. That has to do with -- it is the best way for the whole company. I mean it's the best way for our organization. It's the best way for our people. And it's also the best home, we think, for our assets. So -- but I can also say that in terms of timing here, I think that if SeaBird was a stock that Green Energy owned, illiquid with stock, I think, timing-wise, it would have made sense for Green Energy Group to try to time an exit from the industry maybe at a later point. But that is not the case. SeaBird is a company, and we're trying to, just like we're doing in Marine Minerals, we're actually trying to do something with the industry structure in OBN. And we need to -- we need to strike. We need to strike those deals. We need to forge those partnerships and combinations when we can. And we think that the upturn that we're seeing now is also helping to create the platform then for a deal like this to happen. That is 1 thing. Another thing is that we're not selling. I mean the market is at an early point in an upturn. We firmly believe that. But we're not selling at a trough price. If you look at the price achieved, it is quite a lot above the trough price. Just in share price terms, the price that we have announced of above $50 million, indicates something like 4x where the share dropped earlier this year in January, February -- earlier this year. So I guess that helps to explain it. It both has to do with the issue of acting or executing on the industrial logic, which is not something you can sit and finally tune in terms of equity markets. It is longer processes. It's not a liquid situation that we can choose exactly when to exit from. And also, it has to do with the price, which we think is a very good price compared to where the share price has been, of course. And it's also -- it's also a good price seen up against alternative projects for Green Energy Group. So we are very happy with it, and we think it's beneficial for our shareholders. And then the first half of that question, can you just repeat that?

The -- it was, why you're selling -- sorry, the first or second part?

I answered the second part. The first half of the question.

What is the plan going forward if you sell the seismic activity?

Right. So the plan going forward that we have announced is that the company will -- if this transaction happens, then the company will -- Green Energy Group will own Green Minerals and be a much stronger owner of Green Minerals going forward. I think that is really important, and that is a positive point for Green Minerals. But aside from that, the company will have a fair amount of cash -- net cash on this balance sheet. And that cash is -- we plan to use for 2 purposes. Number 1 is some of that cash will be returned to shareholders, probably through buybacks, and some of the cash will be used for new investments. As you know, we set up business development activity last year. We are -- we have been working for quite some while then on new projects that we plan to execute on that when in position in the second half.

Okay. The next question is, how many coming contracts do you have going forward? Or is the 90-day contract, the last one?

I sincerely hope the 90-day contract for Fulmar is not going to be our last contract. I can't imagine that, that would be the case. Of course, we can't comment on future contracts until we actually sign them. And as soon as we sign them, we will release news about that. So yes. So -- but I can say we have a strong market. We are trying to position our vessels as optimally as we possibly can and contracts and contract news will be reflecting that both in terms of timing of when we announce contracts and in terms of earnings coming out of those contracts.

Okay. How do you think rates could go in this cycle?

That is very hard to say. Unfortunately, we don't have a crystal ball here. But yes, I already talked about the -- the fact that I think earnings-wise, we -- the upturn is actually happening a little bit faster than what we indicated in March. Looking at the new bid cost for a vessel like we have, a high-end OBN vessel, I see no reason why we in this upturn wouldn't should pass the last upturn, which was $85,000 per day. Remember, in this type of industry, goes for shipping and oil services, typically because of the building up of capacity and the potential for overcapacity coming off a peak, typically, you have long periods of lower than normal profitability. But then you have short periods of much higher than normal profitability. The periods where you overshoot on the profitability, typically, that overshoot can go very far. It doesn't maybe -- exist or the situation doesn't persist for a very long time for many, many years. But the years that the situation is there, typically can overshoot a lot. So I don't want to limit our bidding here, but I see no reason why we couldn't go past the previous high of $85,000 at least.

Okay. Next 1 is, what is the Eagle Explorer doing now and when you expect it to be back on contract?

Yes. So the Eagle Explorer, as we said previously, was lined up for a contract, had a contract for -- so the plan for Eagle Explorer was on its way from the 2D shoot that it has conducted for many months then in India and on its way directly to another contract, not too far away. That unfortunately got canceled. We keep the vessel in the region and for very good reasons. And that has to do with contract opportunities in that same region. So we don't intend to be moving it out of it. We could -- I've moved it out of there, very short term, just over the summer. -- and be doing contracts in other places. But we don't really intend to do that. We want to stay in the region, and we have our eyes fixed on some longer-term opportunities that we are really keen to get for the vessel. So this is a bit back to what Finn Atle talked about, and that is the slightly changed nature of the contract opportunities that we see. -- and we really want to go -- we really think that there are some -- there are some very attractive contract opportunities coming up more attractive than the normal OBN type of work, and we want to shoot for those. So expectation is for Eagle to be on work sometime during the third quarter.

Okay. When can we expect a conclusion whether the vessels or the seismic activity is sold? It's running deadline?

We haven't announced -- we haven't announced the deadline yet. So we -- what we have announced is that there is an exclusive period under LOI. And that period is still ongoing, and we will inform the market about any progress in that situation. And of course, whenever that ends up being a signing of an SPA?

Are there any other interests in the vessels?

Yes. As we have said, we -- the whole process was -- we were very vocal early last year about consolidating there will be a market. That has led to number of incoming interest and discussions. And that was the reason that we launched a strategic review in January, just to make sure that we had a well-structured process to maximize shareholder value. So obviously, what that means is that, yes, there are -- there have been other talks and other interests on our seismic operation. Yes. Any other questions?

Has the rate for search vessels improved so far this year?

Can you repeat that, please, Erik?

Has the rates for search vessels improved so far this year?

Yes. And then I go back to the slide that I showed and what we talked about there. So yes.

Okay. Next question is, will there be a new share issue in the nearest future? And how long can you operate to seismic activity without a new share issue?

There are no share issues planned for the company. And again, to that question, -- please have a look at the slide going through the market and what we see in terms of rates and market outlook.

Is a sale of the seismic operation the only option or is the merger also a possibility?

Yes. So now we have given exclusivity to 1 potential buyer. And that is what we're working with. And -- as I said, there have been other talks and hypothetically, if this situation wouldn't conclude, there are other opportunities, which -- of which mergers also could be on the table. As we have said before, there are -- I think we stated in January that we saw potential both for mergers or straight up sale of the company.

Okay. Will also Petrel get sold in the LOI agreement?

Yes, the LOI includes the entire seismic operation. Having said that, we also announced, I guess that was in January as well, that we have put Petrel up for sale. And -- so there is a process going on with the Petrel. But yes, 100% of seismic operation, including Petrel is included.

What is a likely utilization in a tight market?

Yes, that's a good question. As we try to show on this slide, Utilization is a moving target, it moves with the market. So at the very -- or in a trough, we see the utilization probably not more than 50%. And -- but in a tight market, around 80%. But then again, back to what Finn Atle said, that is the changing nature of the contracts. And that means that we think that the OBN players, to the extent that they haven't secured capacity already, we think that they should do it. And we think that they think the same. And what that means is the very high likelihood for longer-term contracts, which, again, changes the thinking around the utilization. So you could easily see utilization up to close to 100% in a tight market. This is what we think we will see going forward, actually, for the top -- for the high-end vessels like our own.

Okay. We have 1 final question. Will you pay down the whole debt if you sell the seismic part of the company, isn't that better than buyback of shares?

Well, the question is yes and yes -- or the answer to those 2 is yes and yes. Number one, we will pay down all of the debt. And number two, paying down the debt is better than buying back shares. But I can also add, number three, that we can do both. We are going to pay down all the debt, and we are going to buy back shares and we will have capital available for new investments after that. So this changes the -- this changes the foundation for the company and our maneuverability and the possibilities for the company, it turns it upside down. So we will do all 3.

Okay. We've got 1 more question. How will the company earn money if we only set left with Green Minerals project? And the project isn't expected to earn money before many years.

Can you repeat that, Erik? I couldn't hear that.

Yes. How will the company earn money if we only set left with the Green Minerals project and the project isn't expected to earn money before in many years.

Right. Okay. So Green Energy Group, the way to look at Green Energy Group is as an investment company. Okay. So Green Minerals is 1 investment for Green Energy Group. And we will follow up that investment. And as I said, again, I just want to underline it, I think it's very important for Green Minerals that the company will have an even stronger main owner after this. So Green Energy Group is an investment company. That means that investment companies earn their living by investing and by exiting investments. This is what Green Energy Group will do as well. So Green Minerals, that is correct, the company will earn -- there will -- is in a pre-revenue phase until -- probably until 2028. And the company will need funding. That funding will come partly from Green Energy Group. But mostly, that funding will, of course, come from other sources. It's a pretty big project. We're setting up. It's around $1 billion. So -- so that is a separate project. And I think we can -- we are very optimistic that funding that $1 billion is not going to be -- should not be hard given the profitability of a project like that. Look at the numbers. We're talking about -- we're talking about the annual EBITDA of more than 35% of the investment cost. So -- and other than that and the new investments will be made and the company will earn its living as any other investment company. Of course, the -- how much that earnings or that living will be, will depend on the success of our investment efforts.

Okay. That was all the questions.

All right. Well, then we have spent more or less exactly an hour, I guess. So that is an opportune time to end this call. So I want to thank you all for you -- all for attending. And see you again in 3 months. Thank you very much.