TGS ASA (TGS) Earnings Call Transcript & Summary

Good morning or afternoon from wherever you're joining us. Welcome to TGS Capital Markets Day 2023 coming to you live from Oslo, Norway. My name is Jaclyn Townsend, Vice President of Marketing at TGS. This live event is a full presentation covering our Capital Markets Day. A condensed and on-demand version will be available after the event on the newly redesigned tgs.com, which I encourage you to visit and explore our wide range of energy data, insights and solutions. Before we get started, I would like to draw your attention to review our forward-looking statements. And for those of us joining us live here in Oslo, I did want to cover the emergency exit plan. So there is one exit to your right, and then you can also come -- go out the way that you came in up the stairs and out the front door. Okay. Today's agenda will begin with a word from our Board of Directors Chair, Chris Finlayson followed by our keynote, Dr. Scott Tinker. Then we will have a short break, and we'll cover the market outlook and discuss our strategic and sustainability priorities and then our financial guidance. Finally, we will summarize today's topics, followed by a live Q&A, and we'll actually have a Q&A right after the keynote as well. Okay. With us today is Chris Finlayson, TGS's Board of Directors Chair. Chris, a geologist and petroleum engineer by trade, has nearly 40 years of technical and commercial experience in the oil and gas industry. Chris was elected as Board Director in 2019 and then Chair in 2022. Next is Sven Borre Larsen, CFO, who joined TGS in 2015. He had several years of experience as CFO in the oil service industry and from the investment banking industry. Also with us today is Will Ashby, Executive Vice President of Eastern Hemisphere. Will joined TGS in 2011 and has served in several leadership roles within the company before assuming his role Will had an executive responsibility over North America. Next is David Hajovsky, who joined TGS in 2017 and have had several leadership roles with within TGS, including Vice President of Latin America and Vice President of Africa, Middle East and Asia Pacific. Before assuming the role of Executive Vice President of Western Hemisphere in 2021. Then we have Jan Schoolmeesters , who joined TGS with the acquisition of Spectrum, where he was a COO since 2011 and now serves as the Executive Vice President of Digital Energy Solutions. Also with us is Carel Hooijkaas, who has recently been appointed to Executive Vice President of acquisition through the acquisition of Magseis Fairfield. Carel brings over 25 years of oilfield services and equipment experience and has also held several executive positions throughout his career, including CEO of Magseis Fairfield from 2019 to 2022. And finally, I'd like introduce Whitney Eaton, who joined TGS in 2014 as a Corporate Compliance Director and has since served TGS in a variety of leadership capacities before assuming the role of Executive Vice President of People and ESG in 2021. So during today's event, there is an opportunity to ask questions. If you're online, you can ask questions any time during the presentation by clicking the orange button, ask a question, in your display, and we'll address as many as possible during the Q&A sessions, again, one after the Q&A and one at the end of our presentation. If you're joining us live, you may ask a question by raising your hand when that time comes. So now without further ado, it's my pleasure to introduce TGS's Board Chair, Chris Finlayson. Welcome, Chris.

I prefer if you applaud when you sit down rather than you stand up. So good afternoon, ladies and gentlemen, and thank you for being able to join us, whether in person or online at this year's TGS Capital Markets Day. As was said, my name is Chris Finlayson, and I've been a Director of TGS now for nearly 4 years. And about a year ago, I stepped up to replace Hank Hamilton as Chair when he elected to retire after a long and highly honorable time in the role. Our external speaker, Scott Tinker, will shortly give us a fascinating perspective on the realities of the energy transition and the implications of that for our business. After that and after the break, Kristian and his team will have a really exciting set of presentations to share with you, demonstrating the great opportunity that we believe we have in front of us. I don't want to steal their thunder, but what I will do is set the scene a little. Now we set our strategy some 4 years ago in a very different macroeconomic climate. I would characterize it as increase our market share in our [ top ] core business, multi-client seismic; broaden the seismic market we address by building our position infrastructure-led exploration, ILX; and then use our core skills in data to address new markets in the energy transition; and over time, to build a significant market position in data for the renewable sector. Now whilst rather like battle plans, many company strategies don't survive contact with the enemy or reality for very long, I'm delighted to say that we have continued to successfully pursue these themes through the downturn and now into the current growth environment. In-house growth in activity has been supplemented by five highly successful acquisitions over this period: Spectrum and ION in our multi-client data business; Magseis in the ocean bottom node ILX space; and 4C and Prediktor in wind and solar, respectively. As a Board, we are committed to ensuring that any acquisition gives value to our shareholders as well as supporting and being aligned with our strategic objectives. Furthermore, they must be rapidly integrated into TGS' structure and corporate ethos to ensure that synergies that have been identified are rapidly and fully realized. We think that this is -- we, as a Board, that is, think that this has become a differentiating skill of our leadership team with the successful integration of retained staff after an acquisition and their alignment into the One TGS culture, which is so strong. Of course, these acquisitions have only been possible because of the strong financial position, which TGS has been able to build and to maintain with flexibility through the cycle, and we believe that this will remain extremely important in the future. Our low debt burden gives us flexibility and the ability to respond to opportunity, and that is not open to many of our competitors in the oilfield services sector. We're also passionate about how we do our business. And you'll hear later about our industry-leading progress in all aspects of ESG and in our work environments and the recognition that this has received. As a Board, we strongly support management in their commitment to move further in these areas to make TGS both an environmental leader and to keep it a great place to work. In the end, our business has three assets: our industry-leading database, which Kristian talked about in the video there; our differentiating technologies; and our people. You will hear how we continue to build our industry-leading position in data, seismic, well, wind and solar, and how we are using technology to extract extra value from this data, for example, through the provision of integrated data to carbon capture and storage schemes and by extending our multi-client model into the wind arena. However, beyond strategy, governance and financial monitoring, it's a key responsibility of the modern Board to ensure that our human assets, our talent, is challenged, developed, suitably rewarded and, most importantly, retained. In my time at TGS, I've been deeply impressed by the differentiating quality of our staff, both supporting Kristian at leadership level but also throughout the organization. We spent significant time as a Board on this. And given the challenges of significant establishments in the very different environments of the U.S.A., U.K. and of course, Norway, we need to properly balance, attracting, and retaining the right staff and leadership to ensure that we can deliver maximum value to our shareholders. I believe that TGS is very well positioned for further growth and value creation with strong leadership, great technology and leading innovation. With that, I would like to once again thank you all for your attendance today and promise you an exciting and, I think, thought-provoking set of presentations. And I'd now like to introduce Scott, who I've lost, he's over here, Scott Tinker, to deliver our keynote address. Thank you all very much.

Well, good afternoon, and my brain is still good morning, so -- having traveled from Austin, Texas yesterday. As Chris was talking about a plan, I was thinking the quote from the famous philosopher and ex-boxer, Mike Tyson, who said, "Everybody has a plan until I punch him in the face." And this industry gets punched in the face a bit on it, but it keeps coming back, and I'm talking about the broad energy industry. So I'm glad to be here. I think the last time it was in Oslo, I believe, was 2009, and I was here to interview Helge Lund, who was CEO of Statoil at the time for our first film switch. And that film starts out with the word Norway. The very first word, Norway. Energy so clean, you can drink it. And we're, of course, talking about your remarkable hydro. So it's really nice to be back. I'm glad to join you here today and got a lot to talk about. We'll start with some other philosophy here. It's the mark of an educated mine to be able to entertain a thought without accepting it. Wouldn't that be nice, if we could just have conversations, civil dialogue? You don't have to accept everything I say, you probably won't, and that's okay. We do need to be able to talk. Now another philosopher in the U.S. is ball player Yogi Berra, "if the world was perfect, it wouldn't be." And we know we live in an imperfect world. We know that. Nothing is ever going to be perfect. And I have an axiom that most people don't know how gasoline is made or electricity comes from, but they think they do. And they vote, right? They vote. And so this is what drives this global dynamic in energy so much. And here's a young person getting on an airplane. And you can see on their backpack, it says, "People versus fossil fuels." They have an [ Nalgene ] water bottle and they're getting on a plane flying on jet fuel. Now I don't mind passion. I love passion, but walk. Don't fly. Put your passion where your feet are. And this is one of the great challenges is education and understanding of energy and what fossil fuels component actually do. Now look, we started 1,000 years ago in caves, cooking and keeping ourselves warm. The first energy was the Sun. The Sun was the first form of energy, and it grew the hay that powered our vehicles, these things that pulled their food around, right, their own energy. And then we use the motion of the wind, and the motion of water to make energy many, many years ago. And bigger dams we built. And finally, we started killing whales to get their oil and light the light that we put in our homes. So that's kind of the old energy, if you will. And this is the energy that's powered about one person at a time. And then we found oil and coal. And coal changed the world. You burn coal, boil water, make steam, turn a turbine, run a generator, and that makes light. And electricity actually changed the world. We could power more people than just one now with coal. And then liquid hydrocarbons came along, which we refined, and we put into our vehicles, very dense. And then methane, and finally, nuclear. And our nuclear and natural gas, the clean future, as we look out at that world in the future, I don't know. But why am I showing you this? This is the most important concept in energy. It's energy density. Over the last 1,000 years, energy has gotten denser not a little bit, a lot denser, hundreds of times denser. And we have words for these things. But dense energy drives modern societies. That's what allows us to be here in this world that we live in. That's a very, very privileged developed world. So we call these renewable and thermal, left and right. We call them clean and dirty. You might use these words. Your kids certainly learn them in schools. It's kind of judgmental. On the other side, you might call them intermittent and reliable. It just depends on your perspective, doesn't it, or weather-dependent and firm energy. And really, it's molecules and electrons. The things on the left make electricity. The things on the right, you can burn to make electricity, but they do other things as well. They make a lot of heat. You have to have a lot of heat to make cement and steel and ammonia and plastics, a lot of heat, not electricity, more than that. The developed world needs electricity and fuels, pure and simple. We are not going to electrify everything. It just won't work. The challenge, of course, is many people in the world today don't have any of these things, or very few. And I've been lucky to visit them. These are the countries I've been in 60 of them, color coded by a number of visits, Norway is red, which means more than five, and I've met a lot of folks. All these came from our second film about energy poverty released in 2020. And this man my age had tears in his eyes when he told me his kids and grandkids would have something he'd never had. They had school. They had come out of the bush literally in Ethiopia and were in school for the first time. If you come over to [indiscernible] cooking in doors with wood like almost 3 billion people in the world still do today. And we visited the local hospital, the Sunny Memorial Hospital, 3 billion people breathing particulates. 3 million a year die, mostly kids and women from cancer and other lung diseases, 3 million. That's what COVID killed in 2020 in the whole world, and we shut down the world economy for that. This is happening every single year in the world today. I come back to Africa, the Kibera, the largest slum outside of Nairobi. And you see a church that doubles as a school with two light bulbs, finally dangling inside of it. And kids are coming home in their uniforms across mounds of polluted water and garbage and other kinds of things, trying to get education and come over to Vietnam. And we meet [indiscernible] in the red floating house there. And every morning, she carries her crippled son on her back across that plank to get him to a school so he can have something that she didn't have. Now as we come back to India, we see some of the most severe poverty I've ever seen in my life and some of the most severe wealth. It's a remarkable country of extremes. And finally, in Colombia, we brought First Solar here. This is the indigenous village of [ Kenechukwu ] the [ Arawak ] people. You can see the solar array on the left. It powers a 7 mud huts [indiscernible] a couple of light bulbs and some ceiling fans. And these kids, half of them will die before they reach adulthood of a tooth infection or dysentery. It won't kill you, but it kills them. And then last night, when we turned on the light for the first time on a pole they've carved in the Village Center. I was with the [indiscernible] the chief. It was a very meaningful moment. They never see each other at night in their own village except over a fire. It was remarkable for all of us to feel that. So here we sit. We sit in this world where 3/4 of the people now live in Latin America, Asia and Africa, 3 out of every 4, and they're growing faster than the rest. It's a paradox, isn't it? Energy won't end poverty. You can't end poverty without energy. You have to have it to get started. It's time to power the people in this world. It is time. So it's quiz time. They didn't tell you you're going to actually have to take a quiz and pass in order to leave. So I hope you pass. It's the honor system, those here, lucky. Here's the first question. What percentage of the population live at some level of energy property. What percent? Just think about it in your head. Let's take a look. This is the world's income, okay, color-coded, low, reds and the yellows here. It's all over the world. But it's concentrated. I'm going to put the city livability index on here. This is how livable the cities with the least in orange. Look at where the least livable cities are, the orange, yellow and green, where it's poor. And now we'll put the most livable cities in blue, right on top of wealth. Of course, they are. That won't surprise anyone. So when you see these emerging economies, again, all over the world, but they're concentrated here in what's called the Global South now by subequatorial regions. They live in energy poverty for the most part. They just need something to get started, affordable energy to get started. As you come in through the developing world in various shades of pink, they have energy. It's not secure. It comes and goes to them. And you and I don't like it when our energy has gone for 4 hours or even a day, but this is routine in many parts of the world today who need reliable energy. And then the wealthy world, us in the blue. We want it clean. We want climate security. We want it clean, okay. And look at the differences here around the world. Where is the cleanest air? The green. Where? Where it's rich. Where is the dirtiest air, where it's 4%. Same with water, Same with soil, okay? We can afford to clean it up. Poor countries can't. The 60 countries I've been in, every time -- the worst environments in the world are where it's poor. They can't afford to clean up that environment. Other priorities take precedent. Greater than 60% of the world live in some state of energy poverty today still without any energy or reliable energy. So it's a great challenge. You bring these all together, and you realize that energy security varies across the globe tremendously. So what does energy security do for us? Well, it underpins healthy economies. Every healthy economy in the world has secure energy, okay? And that allows us to do what? Invest in the environment. It flows this way, energy, the economy, the environment. It flows that way. And I call that overlap space the radical middle for years and years. It's radically lonely sometimes, but that's where the action is, trying to balance those 3 Es, if you will. You can look at a little 8-year policy [indiscernible] or migration. Pre Paris, we're sitting down here in kind of the economic security, and Paris pulled us towards CO2, toward climate. And then COVID said, no, come on back, talk about the economy again. And then net zero emissions, things coming out of Europe mainly. And then COP 26, 1.5 years ago, way towards carbon. And then Mr. Putin said, "No, come on back." Let's talk about energy security. Again, every single political leader in the world is now vocal about energy security. They always are, but they were vocal about it. And then in the Egypt Cup, 27 kind of moved is this way that Africa spoke with one voice. Fossil fuels will lift us from poverty. That's what happened at COP 27, and they're right. It built the West. It built Europe. They'll build the world. We've got the radical middle surrounded. So this brings us to some trends. And I said to the U.S. Senate in the first mention hearing on climate a couple of years ago. We've got to strive to be completely factual but also factually complete, and there's a difference factual completeness is hard. [indiscernible] here we go. Which sources of primary energy have decreased since 1995? Select all that apply. Which have gone down in the last -- or since 1965? Which have gone down in the last almost 70 years? Which of these? Here's the data. And my slides are all color-coded: gray is coal; green is oil; red is gas; nuclear, air in orange, et cetera. So here's the data. Coal and oil are very dense. They make a lot of CO2 when you burn them. Gas and nuclear are very dense. They don't make as much CO2. Hydro and solar and wind, et cetera, are not dense, but they don't make much CO2. They're trade-offs. Nothing is perfect in this world. So when you look at this, you see the 2009 recession, that little dimple down, the Great Recession of the world. And you can see COVID now, too. Everybody -- many people said, this is structural, it's permanent. We're right back to consuming. And 2022 will be even higher. It's just another down dimple in global energy consumption. In fact, we still consume more coal and oil than all the other energy in the world combined by a lot. No source of energy has gone down, not even hay. More people, more consumption, okay, in absolute terms. You'll hear, and it's completely factual, solar and wind are the fastest-growing forms. Look at the data. They're still growing exponentially, remarkable growth, costs coming down, et cetera. What would make this factually complete? If we scale it. So let's scale them. Remember, it's right here in the data. There's solar and wind in the global data. They represent about 10% of the growth in energy demand in the time frame, 10% of the growth, not the base. The scale of energy consumption and demand is phenomenal as we move into the future. Here it is by region, North America and Europe have been flat for close to 40 years, Asia is growing in energy demand tremendously. And the rest of the world is just getting started. Okay. So what does that mean? It means that 3/4 of the world, remember where people live, are just getting started. Consuming about half of the world's energy, 3 out of every 4 people just starting to grow. Here's China. The gray is coal, huge uptick. Here's the rest of China's energy. This isn't electricity, total energy. China consumes more coal than everything else combined and by quite a bit today. That's policy. Chairman Xi has been very, very transparent about it. We're going to build on coal, and they have, and they are. There's no COVID-19 dipped in China. It went up. Okay. And you can pull an article like this every day. That's yesterday, okay, March 6. China leans on coal. Okay. Energy Security. Let's lay India right on top of China. Here's India. You can see that COVID dipped in India. India will pass China in population in April next month, more people. The big difference in terms of energy is India consumes 1/4 of the energy that China does today. So that speaks to per capita energy a quarter. Let's slide India to the left, a quarter century, watch close. Look familiar? What's India going to do? If they do what China did, game over climate. Okay. if they do something different, there's a chance, nuclear, hydro, natural gas, something for firm baseload to complement solar and wind. This was maybe last week. I could pull one of these every day too. Phase down the coal means actually expansion of coal. India -- Mr. Modi has been very clear. We're going to build on coal unless there's something -- some other option for us. If you look at coal consumption in the world, we've come down tremendously in the U.S. and North America and Europe tremendously, cut it in half and still coming down. There's Asian's coal, and the rest of the world, hardly any. In fact, coal is growing tremendously. And it's not just China. Pakistan moving away from gas, Bangladesh moving away from renewables, these are just in the last few weeks. Coal is an Asian story today. Look at the right side. It's an Asian story. Sometimes it's a Europe story. Germany increased its coal. When things got pretty tricky and Russian gas was set back or cut off, right, we fall back on coal. It's interesting. Now let's lay natural gas right on top of this. Same scale. Look to the right on the gas. Every geopolitical region in the world is increasing its natural gas consumption expect Europe is kind of flat. The ratio of gas to coal has gone from 39% to 91%. Gas will pass coal in terms of the most used -- this is generation, it's not capacity, generation, most used fuel, which brings us to optionality. What does it mean? This is the primary energy consumption. I'm going to compare North America, Asia and Europe, but I'm going to start with Norway. Your total energy consumption now watch across the bottom, I'm going to put this blue one. Here we go. Here's Norway. Did you see it happen? Okay. It's there. I promise. And here's the rest of Europe. And here's North America. And here's Asia. 65 years ago, essentially no energy in Asia today, more than Europe and North America combined. What's the mix? This isn't in units now. This is percentage. Europe has cut oil and coal in half, 47% today, down from 90%, grew the gas and nuclear sum and has been growing hydro and solar and wind. That's the European energy mix. 47% and going down 36% in '17. Now I'm going to lay North America right on top. Watch close. 40%, 7% coal and oil. It's the exact same in North America but more gas. And 12%, hydro, solar and wind. And now here comes Asia. Ready? It's different, 73%. Remember, Asia consumes more energy than North America and Europe combined. You just saw the data for that. And then here's Norway. Ready? It's remarkable. Now look, Norway is a country of less than 6 million people with a $1 trillion wealth fund built from oil powered 70% by hydro. You're not normal, okay? The world can't be like you. It doesn't exist out there. The resources like this aren't there, but it's phenomenal. It's phenomenal. Norway, Europe, North America, Asia. Look at the differences as you go across there. Norway, you have oil and gas, and you produce it. Europe in the aggregate doesn't. It imports. The U.S. produces, and it turns out Asia imports too. We'll take a look at the actual details here. Europe and China need optionality to gas and oil. It's interesting, isn't it? Here's the data for gas. These are the largest consuming -- or this is the consumption and is sorted by largest to smallest of gas. And here is the production in the same regions. There's only two regions that consume more than they produce, Asia and Europe, more gas. You need options. The price of gas in the U.S. before shale development looked like this. It was volatile, $5 to $15, pre Great Recession. And then, bam, $3 steady on, saved Mr. Obama's administration after the Great Recession. Trump just rode the wave. Why did this happen? Because of shale. The production of shale doubled. We did fracking, okay? It doubled. The price got stable and there it sits. This is the fastest energy transition probably I've ever seen in the world. yet, some in the U.S. still don't like gas. I took this picture in Aspen, Colorado. You've eaten under these things? Keep yourself warm while you're having outdoor -- just heat the atmosphere directly. Cut out the middle man. And it says it right on the propane tank, Aspen is passionate about climate change. It says it. No global warming. Right here. I gave a talk in California not -- 6, 8 months ago, we were sitting under 10 of these things. We were in short sleeves. It wasn't even chilly. California, burning propane. I don't know if California knows propane's gas. I don't know that they're cutting off gas hookups in San Diego. These are these ironies, Remember, we don't know where gasoline comes from or how electricity is made. These are the great energy ironies, and they abound. Now gas price in North America has gotten a little more volatile. Let's scale it and show it compared to Europe, 5x, 500% more, and they've come down now some in the last few months, but there's still this spread. That's incredible, to see that kind of price. And is it the Ukraine that did that? Well, Ukraine happened here. This precedes Ukraine. Ukraine had exacerbated it, but this precedes the Ukraine. Contrary to what might be said, here's what's been happening. Africa, solar and wind average is there around 10%. Africa, below it for the most part; Asia, China, just above it. Australia, above it. In the Americas, the U.S. and Brazil are above the global average, and here's Europe with solar and wind. Many would say you're leading. You're certainly leading in solar and wind. Here's the energy mix for power now, not total. This is what's happened structurally for electricity generation, come down, coal way down. Gas, nuclear, hydro, solar and wind and other things, now 1/3 for power generation in the EU and U.K., about 1/3. How is that doing for you? Last summer, the prices of electricity were $0.60 a kilowatt hour. That's 5x more expensive than in the U.S. on average. 500% more. Bloomberg said the biggest mistake is the promise to always get lower, and that's true. And this may be okay. It's not a judgment. This is just facts and the physics that the cost to the consumer is more the cost. That gets quoted is this LCOE thing, levelized cost. That's at the plant gate, the bus bar. That's not to you. To get it to you costs money to make it reliable. I have to be something there to back it up, and that's something that's expensive, batteries, gas, load followers, whatever it is. It's more expensive to the consumer. This is policy. This is energy policy that underpins this. I'm not judging it. but, we need to know what's driving this. And it's important to be -- and I wrote a piece in Fortune just a few months ago. This says, optionality is what drives -- we have to have energy optionality. When you start eliminating options, requiring EVs only, cutting off gas hookups in California, you start eliminating options, things get ugly. Markets don't like limited options. Think about it. Same story in oil. That's the product consumption and here's the production. There's only two regions in the world that consume more oil than they produce: Asia and Europe by a lot. So again, you need options to oil. I get it, options to gas or wind options to oil, something for transportation other than that. Enter the electric vehicle. We have about 17 million to 18 million EVs in the world today, and here's where they are geopolitically. We say we're going to 55 million in 3 years, 55 million. How does China in red charge its EVs? Let's be candid about it, with coal. You've seen the data. It's important. Europe and Asia are going to be the growth in EVs. That's what's forecast and that's what will probably happen. Options to oil. Now we say we're going to electrify half of them by 2040. I have no idea where this number comes from. But let's just go with it. Half the fleet, there's 1.4 billion vehicles in the world today. Let's electrify half of them, 700 million. We would take 300 million charging stations about, and we have 10 today, 10 to 15, shown to the left of the gray area. So I can fit the growth in EVs, project it into that curve and see what it's going to take to go to 700 million. It's right along the line. This is incredible. This would be incredible growth [ electrical vehicle ] if the world does this. 700 million, there's about 5,000 batteries on average in each car. Did you know that? A Tesla has 7,000. 3.5 trillion batteries, 3.5 trillion of batteries. We have tens of billions for all our gadgets today. 3.5 trillion new batteries to power half the fleet, and they wear out. You've got to make them again when they wear out. I have to really process all this, and maybe this is why, in addition to the loss of subsidies, Germans are thinking twice about EVs. Cooling off, Kia CEO said, pretty tough. There's a lot coming out now if you read closely and maybe not -- depends on what you like. Whatever you stream yourself, stream something else in the morning and read that because there's a lot coming out that's starting to look at it. And one of the big challenges is the lithium. This is the actual production of lithium today. And here is where we're forecasting it will go or needs to go. And a lot of this is unfinanced projects and recycling, which we don't do a lot of that, the yellow and the blue. The demand is going to exceed that by almost 2x in order to power 700 million. When demand exceeds supply by 2x, even if we can do that supply, things get volatile. Look at the -- in the last 3 years, look at the percentage change in these critical elements, these critical metals, 50% to 100%. And here's lithium, 900% happening, and we've only powered 17 million or 18 million vehicles. They're commodities, volatile and expensive. So optionality matters here. Smaller cars, you bet, you're not hauling as much of the weight in a battery. [ Citi ], quiet, plug it in at night, not driving that far. As the vehicle gets bigger, maybe hydrogen, denser no emissions. And the bigger the vehicle, it's going to still need liquids. I read about things like Elon. Your planes will be flying on batteries. No, they won't. Not if they have people in them, okay? His rockets still fly on batteries. There's a reason for that. He needs energy density. You can't haul the whole weight in a battery, okay? So what are the emissions trends? If you haven't read your neighbor just east, Hans Rosling, who's passed, medical doctor, run a wonderful book called Factfulness. And he said, data must be used to tell the truth. No matter how noble the intentions, buried in the paragraph I found in the last chapter, it's phenomenal. Tell the truth. And it's a wonderful read because it's things are better than you think, 10 reasons why they're better than you think. His son and daughter-in-law finished it. So quiz time. Asia emits more CO2 today than all the rest of the world combined. Is that true or false? Here's the data. Here's us, flat for 30 to 40 years, coming down a little bit, doubled the economy. Here's Asia. And here's the rest of the world kind of just getting started. In fact, Asia does emit more CO2 than the rest of the world, just barely, but growing faster. Why? This is an important graph. Above that red line, countries consume more than they produce. Below the red line, countries produce more than they consume. And across the bottom is the CO2 that gets emitted doing that. The United States emits 5 billion tons of CO2 every year to make our stuff, but we're still consumers. China emits 10 billion but produces a lot more than it consumes. In fact, most of the non-club originations, us, the non-rich, are producers. And most of the rich nations, led by Europe and the U.S. are consumers, which means we're saying, send us our stuff. Check it out. What are you wearing? What's in your phone, your -- everything comes from Asia. And we're effectively saying, make the CO2 while you do it. Use coal. It's cheap and our products delivered affordably. And we kind of close our eyes and call this a zero-emission strategy. How many atmospheres are there in the world? Just one, one global atmosphere. This doesn't address climate change. All right. It's like buying offsets. From who? From who? Asia makes our stuff. And we're good with that, but we better acknowledge the reality of that. So what are the impacts? Yes, climate, big impact, very important. And then we add the land and the air and the water to that and realize these things are very interconnected. "Imagine living a life so carefully that there are no signs you lived at all" I love this quote. By the way, none of you qualify, okay? None of us qualify. There's plenty of signs we live, good and bad. It takes 7x more metals to make an electric vehicle than a combustion engine, 700% more. It's in the batteries. It turns out it takes 600% more metals for solar and wind than natural gas and coal. Natural gas and coal has other issues, but the mining is here, 600% more. Internal combustion engines, we got to drill for it and we burn it, and we dump it into the atmosphere. Solar, wind and EVs, we mine it, and then we dump it into the landfills, just different challenges. On a terawatt hour basis, cement, glass, concrete, steel and other things, the things that you have to burn molecules to get the heat, tremendous amount more for solar and wind because of the density issue. It takes more stuff to gather the sun and the wind than hydrocarbons or uranium [indiscernible] . It's just a denser. It's physics. Again, it's not judgment. Low-density energy require extensive manufactured materials. Where do they come from? These are the top 3 countries producing oil and gas in the world today, the top 3. And here's the top 3 producing other things for solar, wind and batteries. So it's kind of spread around. This is the mines. Who processes it? Who owns the processing? China, [ belt and road ], beautiful, brilliant buy it, ship it to us. We will process it and then distribute it. Who owns the supply chains for solar, wind and batteries? China, for your fuel, for your car. They control that system. And again, it was a brilliant strategy. And there are life cycle impacts then of all these things. This is going from the lowest density biofuels to the highest density nuclear. Biofuels take a lot to grow and process and refine it and move it and burn it, converting carbohydrates to hydrocarbons. That's what bio does. Solar, wind and batteries do these things, too. You mine it, you make it, you deploy it. You have to transmit it, power lines, then you dump it. Oil, gas and coal do all these things, mine, manufacture, refine it, burn it. This is the part where you'll usually really hate me. There's no renewable energy. That's a myth. When you have to get something from the earth and you make these things to collect the energy, and it wears out and you dump it in the earth or you dump it in the atmosphere and do it again and again, it's not renewable. Okay. The Sun and the wind are, so is oil in some sense. I mean it's free, but you got to get it. So we've got to think very carefully about these three resources as we think about transition. What does it really mean? It means we're going to add more energy for a while and lower emissions. That is the two-pronged dual challenge of energy transition, lifting the world up, continuing to keep stable and lowering these emissions quickly and significantly. If you look at annual primary consumption, this is mine. Nobody else is out to 2065 of the 30% solar wind scenario. Coal going down a lot, oil coming down some, gas and nuclear rising and everything else rising even more. Here's the demand for energy. That's the actual demand historical. And I roll it over. As you get out into the middle of the century, coal and oil go way down. Everything else is going up. The emissions from that look like this: coal down; oil down; gas down. This is the fossil fuel emissions from that. It's very different today than it will be in the future. That's a good trend, but it's not net zero, not even close. You've got to capture and store the carbon from a lot of these things in order to be able to do this at scale. It could be 40%, it could be 28%. It could be 60%. It's going to be a challenge, get mining. These are the things we have to think about, technology, and Chris talked about them when he did the intro, the cost to scale and the time frame. They all have to be there. you can't throw one out in order to work, tech, right price, scalable and the time frames needed. Natural gas and nuclear replacing coal, that's a big lever, and it's happening. It's happening in Europe, in the U.S., hydrogen, geothermal, hydro, where it's available as a resource. Carbon capture, direct air capture, nature solutions, these are some big things that are now finally starting to scale. Solar, wind and biomass and, finally, efficiency, can we do more with less. These are the big levers. There are not many more. The actual lower emissions, not trade things, optionality is required. It's what would drive these things at scale. So here we sit. Exact same data, I'm going to show you in the energy mix now back to where we started, the global energy mix. That's that forecast, and here's what it looks like as a percentage. And what you see here, can you see COVID? That's the actual data. It's barely a dimple. These transitions happen very slowly. And big events like that are barely noticeable. That's the biggest one we've seen in 50 years, by the way. You're seeing coal and oil cut in half here by more than half. You're seeing natural gas and nuclear more than double and renewables go up fivefold, 500% in this particular scenario. It's a transition from carbon to hydrocarbons to methane to hydrogen, to uranium [indiscernible]. It's the physics, it's the density. We might need to accelerate it, and we certainly need to capture some of those emissions. We have to have dispatchable and intermittent energy partnered in order to be reliable. Reliability costs money. A portfolio of sources is needed, and there's a lot of oil and gas in that. There it sits, and this is percentage. One of my great fears is that we won't have enough. Underinvestment, public perception, we won't have enough. What happens in the world when we can't get enough solar panels? The markets get a little skittish. What happens if we don't have enough oil and gas? We go to war. It underpins the whole global economy, okay? So this is nontrivial stuff. These are the largest producing companies in the world for oil. Take a look. Now if we combine the two from Russia, they're bigger than Aramco. We have to add all the big 5 to finally get there, the IOCs, the publicly traded and publicly regulated companies to get there. How does that make you feel? It worries me, okay? It worries me. That's one of my big fears. So let's kind of wrap it up here. This is our map of global income, and we're going to fade it into the world at night, this remarkable satellite image. You see where the lights are on, really bright, and where they're not. Here's the energy mixes around the world today. This is the actual data. I'll scale them to be proportional to actual consumption. Asia consumes half the world's energy. You've seen the data. Europe and North America, modern economies require lots of energy. We want to get rid of coal and oil? There is what's left. You want to get rid of gas and nuclear? There's what's left. Some don't want hydro. That leaves us 6%, if we did it fast. What happens if we darken the world's light by 94%? How does that look to you? Seriously, how does that look to you? It looks like the past to me, not the future. Okay. Let's turn them back on. Turn the lights on. In fact, the world, the 3 out of 4 people in the world who need energy and live without secure energy need clothing and shelter and clean water and food, over 1 billion people. Education and health care starts to lift the world out of poverty with energy. Women go for the water. They cook with the wood. They aren't in the schools when their male counterparts are. It differentially -- energy poverty differentially impacts women, okay? Growth population is directly tied to education, immigration and migration away from autocrats. Today, it's happening routinely. The ability to invest in the environment with a healthy economy underpinned by energy and to adapt to and mitigate climate change, these are the big issues. You bring that stuff all together and you start to address the big challenges in that radical middle. Secure energy addresses a lot of these global challenges. I'll leave you with a few thoughts. 6 billion people today need to live better lives. The net zero I'm after is net zero poverty. We saw that. The world changes, okay? Optionality is vital. We got to end this silly competition between fuels. It's not a competition between wind and solar and nuclear and gas. We need them. They do different things in different places. We need them. They're resources, they're not everywhere. All forms of energy have benefits, and they all have impacts, okay? So we got to have access through an analysis of the data. It's critical. Big data, huge data across this whole space, it's vital to our continued understanding. And a couple I'm using -- no one owns the truth. I don't know the truth. We just seek it. We just seek the truth as we continue to learn, shaming enough, cancel shaming. Especially young people, they have to be able to get out and have these dialogues without being canceled because they saved the world oil. It's not denial. It's a big part of our future. We must balance these 3Es, energy, economy and climate, the environment. And finally, it's not simple, okay? It's not simple. But it's solvable if we actually deal with the data. If we deal with it, it's solvable. It's not binary. It's not clean and dirty. It's not good and bad. It's not believe or deny. It's is solvable. My day job is here, 250 folks working on these. Started a not-for-profit many years ago. Check it out. It's all film-based, a lot of stuff. The Ted Talk I gave last year, 17 minutes, you can grab it your kids. And we got a PBS talk show out, Energy & Climate talk show. You can stream the first season, season 2 is coming out next month, and we've already filmed season 3 big time, big name people, 2 guests on every episode. Who don't agree? Dan, you're going to talk with [indiscernible] about geopolitics, et cetera. It's a blast, but you can stream these things. They're 25 minutes. And we're across the U.S., and that world channel picked us up. So 100 million households with it. Thanks for your time. And if we have time, I'm happy to answer any questions you might have. Thanks.

Thank you for that, Scott. Very interesting. And we have time for a few questions from Scott if there are anyone.

That I hear that you're shy. So who wants to take the risk. And they didn't bring me here to just tell you what you want to hear, obviously. I think Kristian bought me here to tell you what I've been saying for 30 years.

You mentioned hydrogen as one of the future solutions. Can you just talk about your views on green versus blue hydrogen? Can you just talk about your views on green versus blue hydrogen shows renewable energy through inefficient processes in green and volume on the blue? So how do those 2 merge?

Sure. Yes. hydrogen doesn't -- unfortunately, H20 doesn't float around naturally very many places. You can find it, but you have to make it. So you either split the water molecule H20, or you split methane and CH4. It takes less energy to split the methane molecule. It's more affordable. That's why almost all the hydrogen in the world today comes from methane, not water. Green would be splitting water with solar and wind. The hydrogens aren't color-coded. They're all the same color and no color. But we call that one green, solar, wind and water. It's going to be expensive. It takes a lot of energy to do it. As you kind of come down to the suite, blue hydrogen, things involving methane, where you capture the carbon and store it, you've got to put the cost to capture on there. But still in most scenarios today, more affordable than solar and wind and water, hydrolysis. One is steam reforming, one is hydrolysis. I kind of like pink hydrogen just because I'm a fan of pink. I almost wore pink shirt, but the tie didn't match. So pink is nuclear and either methane or water hydrolysis, but using nuclear as the source, no emissions there, et cetera. So hydrogen is a great fuel, burns. Terrible example, the Hindenburg burns. And it's also an energy carrier, electricity. You can put it in cars and fuel cells, no emissions. Just like batteries, only denser. All right? So I see the hydrogen economy has been coming. It's going to take a while. I know Europe has a strategy to use hydrogen to back up solar and wind. I would suggest you have something else, too. Okay. It's going to take a while. Part of the challenge with hydrogen is you have to have it at scale. Where do you store it? It's the lightest element on the periodic table. Remember, element #1. It likes to escape, more than helium. So you have to be able to move it and store it safely. Storing it at scale is not easy. We've got a big consortium at the bureau on hydrogen storage. A lot of companies have joined that. How do you do it? So there's challenges with hydrogen. Let's not call it a silver bullet yet, but I like the directionality. What else you got?

It's also possible to ask questions online. There seem...

Here's another one in the audience, same bold person. We may as well know your name now, I mean.

It's Mike Pickup from Barclays. You just mentioned there on cost of hydrogen. But obviously, a lot of this needs extra technology added to existing to get us to the environmental impact. So in your model for 2065, how much more expensive is energy in the future than it is today?

That's a good question. That varies by geopolitical region because it's not -- some of parts of it aren't fungible. So natural gas actually today still isn't globally fungible like oil. We're getting there with LNG, but we're not there yet. So it still varies geopolitically by resource. Overall, probably more expensive because you're having -- you're using a piece of it that has to be backed up. But the technologies are going to help bring that cost down, economies of scale. Some regions will be winners depending on the resource. Some have great sun. Some have great wind, some don't. Some have good natural gas. Some have good oil, some don't. Most places to do nuclear, uranium and thorium, not hard to get it where it needs to go. I know Europe has got sort of long-term lingering issues with nuclear. That's unfortunate. Nuclear would be a remarkable piece of the solution here in Europe in my opinion if you could get over that. So does the U.S., by the way. But we're just starting to crack that nut in the U.S., particularly with small modular nuclear reactors, things like TerraPower with Bill Gates; or NuScale, John Hopkins company. We're seeing the patents go through. And serial #1 being built there, 50, 100, 150-megawatt jobbers instead of these gigawatt. So I see nuclear having a big role to play. Cost of energy overall, probably a little bit more, but not tremendously unless we try to force it, and I hope I communicated that. Policy can force transition, and transition usually bites back. Physics bites back. Economics bite back. And they say, no. The markets aren't ready for that. And in fact, it's not the best long-term solution only. If you eliminate optionality, things get expensive. What other questions do we have together?

We have one online here from William Davy. Giving you a slide on minerals and metals required for renewable energy, do you consider green hydrogen to be net 0 emissions?

It takes -- mining takes energy, and a lot of that is done with diesel. It can be done with electricity, which has to be generated somewhere. So there are emissions from mining and not as much as if you're burning oil in cars. Okay? So it's not net 0, but it's lower emissions. The mining component of that for splitting hydrogen with solar and wind. Solar and wind take a lot of stuff to make the panels and the turbine blades, and we dump them in landfills. But in an emissions-only game, better. If you think about the land, air and the water, you've got to start to kind of blend that all in. And again, I like the options. I like options of trying to protect the whole environment, climate for sure, but it may not be a perfect ending. Okay. Analogy I might use is how many are runners in the room, and you won a marathon. Anybody ever run a marathon? Put up your hand. Oh, lots of you. So you set a time goal for yourself, right? Maybe if it's like me, it'd be 7 hours. But maybe you set 4 hours for yourself. If you run it in 4 hours and 15 minutes, did you fail? No, you got pretty damn close. 4 hours and 15 minutes, not a bad marathon. If I do net 70, did I fail? Did I help climate? Probably quite a bit as long as I don't hurt the growing economy and all the people that are trying to lift themselves out of poverty along the way, then probably a net benefit there. We might be able to go lower. But who does that hurt? And we can't forget that. We cannot leave 6 billion people behind or other things come to bear. And I think sometimes we forget that most of the world doesn't live like us.

I think we'll leave it at that and to not mess up the time plan we have laid out. Big thank you to you, Scott.

Thank you.

Thank you. And we will meet back here in roughly 10 minutes quarter past, and there is coffee and mineral water and drinks outside. [Break]

Good afternoon, everyone. And good morning for people who follow us from North America. My name is Kristian Johansen. I'm the CEO of TGS. I noticed that Jaclyn forgot to introduce me so I probably have to do that myself. I want to start by thanking Scott for his great presentation today. There is a story behind that. I think I met Scott about 5 or 6 years ago, and I think Scott is one of the few who has kept a completely consistent message throughout this transition that our whole world has gone through over the past few years. And I think when you think back on that and you see people kind of move with the wind, what Scott has basically been doing is presenting facts and presenting high-level research for many, many years, 30 years, as he said, and it's been great. It's something I even use myself sometimes when you struggle a little bit and you get a little bit uncomfortable about, are you still going to have invest a lot of money into oil and gas. Going back to his TED talks and really look at the facts and really see how this plays out over time has been extremely valuable for me. And this is partly what the story today is going to be about. It's about a strategy that hasn't really changed much. It's about a strategy that we launched back in 2019. And since 2019, we've probably seen the greatest volatility in our business ever, but we've kept a straight course in terms of our strategic priorities. And as you will see in a few minutes, we have delivered on most of them as well. So I'm going to start talking about the key messages of the presentation. So one is becoming more and more evident every day. We are looking at a multiyear upcycle that is expected for all energy sources, not only for renewables, but also for oil and gas. There is a significant comeback now. I think E&P spending was up about 30% in 2022. It's still going to be double-digit growth in 2023 after a very strong comeback last year. TGS is resilient, sustainable and proven business model, has become even stronger with some of the acquisitions that we made. And these acquisitions that we executed on in the summer of 2022 is part of a long-term plan that we actually built back in 2019. TGS is extremely well positioned for leadership in both emerging and mature basins, and you're going to hear David and Will talk more about in their presentations today. Carel is also going to talk about how we're going to leverage our unique technology portfolio and capitalize on our #1 global OBN position. And last but not least, Jan and Whitney are going to talk about the further diversification of TGS. We're going to see further growth in new energy solutions. And as you probably saw from Scott's slides, that's where you're going to see the highest growth rates. And we are extremely well positioned there too, which Jan is going to talk more about, and then ESG performance and leading ESG performance. It's just a license to operate in the future, and I'm extremely proud of what TGS has done in that regard, and Whitney is going to talk more about that. Okay. So this is a new and more diversified TGS. This is a very different slide to what it would have been 18 months ago. We basically have 4 very strong industry-leading pillars here. We have the leading multiclients data library. We've invested about $5 billion over the past 40 years in that. We are present both onshore and offshore, and we're present both in Frontier and ILEC. This is still the core of what TGS is doing, and that is not going to change over the next years or decades. We're going to be or continue to be asset light. We're going to continue to invest heavily. We're going to continue to invest countercyclically when we need it. Ocean bottom nodes is one of the new pillars here. So we are the -- we now have the world's leading OBN offering, as you all know, from the acquisition of Magseis with a technology leader in that industry, and we have a strong track record in all key basins, particularly U.S. Gulf of Mexico and the North Sea. We, in fact, invested in more than 100 surveys or completed more than 100 surveys in OBN. New energy data. We have data offerings for pretty much all renewables. We have the Wind AXIOM and 4C Offshore that Jan is going to talk about. We have CCS capabilities, as Scott talked about, a phenomenal growth expected in that market going forward. And then we even had performance optimization software that is installed in many of the biggest solar projects in the world through the acquisition of Prediktor. Data processing. We have about 250 processing employees globally. This was further strengthened with the acquisition of ION that we did back in 2022. But we have unmatched compute capacity through the collaboration with Google, and we have both land and marine processing capabilities. So it's clearly a compelling investment case that we're presenting here today, and it's an investment case that I'm extremely proud to present to you all. Number one is that we see sharp recovery in E&P spending. I don't think anyone questions that anymore. We've seen that taking place throughout the course of 2022, whereas I said, E&P spending grew by about 30%. The same with seismic spending, grew about 30%. The TGS actually grew our late sales by more than 100% on a like-for-like basis from 2021 to 2022. So we have high expectations of a multiyear cycle after 8 years of underinvestments in oil and gas. And I think for those of you who follow the news on a daily basis, you see BP's U-turn in their strategy that was announced a couple of weeks ago. You saw a new discovery by Shell announced this morning. I mean there are numerous news articles now almost every day about E&Ps, who are gradually changing the course and gradually understanding that we need to be in oil and gas to help out on the story that Scott explained today. We're going to capitalize some M&A and investments. So we have invested a lot during this down cycle. And as I said, it's -- there were times, especially when we read the IEA report in June 2021, where it says no new exploration is needed, probably the toughest day of my life in oil and gas. But that's the time when you go back and you listen to Scott Tinker, and you continue to invest. And I think the 3 big investments that we did back in the summer of 2022 has got to pay off really well for TGS in the future. The timing couldn't have been better. We're going to seek OBN margin improvement, and we're going to start generating free cash flow from our OBN business. We're going to capitalize on the energy evolution, which we are about to do. We're even making money in that business, and there's not a whole lot of companies who do that. But we're growing that business, and we're growing that in a profitable way. And then everything is backed by strong financials and stability. So we have to keep having an industry-leading balance sheet. We have strong free cash flow generation through the cycles, and we have significant dividend capacity, and then we'll come back to that. So the current position, again, is a result of strategic planning and execution. These are the main bullets that we showed back in 2019. We were going to introduce new technologies in mature basins. This is part of the reason for the acquisition of Magseis, of course, who are market leading in the U.S., Gulf of Mexico and North Sea, which are clearly mature basins, strengthening the position in South Atlantic. As a result of that, we went ahead and we acquired Spectrum, and we also acquired ION to strengthen our position there. And as Will is going to talk about today, we have an industry-leading position in an area that TGS was rather weak back in 2018. Further growth onshore, we put that on hold because we probably overestimated that comeback in that market. But that's also important in terms of strategy. Sometimes you need to realize that you were wrong, and you put it on hold. Expand value chain through data and analytics. Jan is going to talk a little bit about that. But I mean that's really the engine to all the new initiatives in new energy solutions. It's built by leading data and analytics resources that we have in-house. Imaging quality and reputation, we can clearly tick off that box, too. And I think the acquisition of ION is important in that regard. It definitely ticks off a box of strategic importance of that. And then the data offering towards other energy-related industries. Jan will talk more about that. But we clearly feel we're on the right track, and we feel like nothing has changed. So in 2019 or '20, when everybody was going to run after the renewable opportunities, we kept the study course. And now when everybody is moving back again and running back to oil and gas, we still keep a steady course. This is an important part of our strategy, and we're going to continue to invest in that business going forward. M&A has been key to fulfill these ambitions, and I'm really proud to present this slide. It shows 12 companies that are now part of TGS. So it started actually with CGG 2D. That was acquired by Spectrum back in 2011. Spectrum also acquired Fugro in tough competition with TGS in 2015. And then we acquired Spectrum in 2019. And then you see on the other line here, we started -- TGS started or entered into the onshore market in Canada in 2013 with the acquisition of Arcis, gave us an industry-leading position in Canada onshore. We acquired the multiclient library of Polarcus in 2015. 2017 was a relatively tough year for our industry, and TGS, as always, are being countercyclical, and we make acquisitions when other people suffer from poor financial results. So we actually acquired multiclient libraries of SeaBird Exploration, multiclient Geophysical and Dolphin during the same year. Then Spectrum, as I said in 2019. And then you see the 2 acquisitions that we made in our new energy business, ForeSEE in 2021 and Prediktor in 2022. And then finally, ION in 2022 and then Magseis in 2023 -- early 2023 when that transaction closed. It's hard to say. I mean there's always a mixed bag in terms of success when you buy a lot of companies. I think I can clearly say that most of these companies have done really well. Most of these acquisitions have paid off really well. It's kind of hard to rank them, but I think ION will probably go into the history books of the best acquisition we made. We started to really get -- we were short of time there. We really had to close that transaction because we saw the market, we're really picking up again. And within 6 months after we acquired ION, we got all the money back again. So it's been a transaction that I almost feel embarrassed to talk about. And on top of that, we also got a lot of technologies from the acquisition of ION. So it's clearly been a very, very good transaction for TGS. So moving on, I think we're well positioned for a multiyear upturn. And I think everybody talks about this multiyear upturn, and I think these 4 illustrations really do a good job in terms of providing some factfulness to that. So number one, you see the oil and gas production from current fields versus long-term demand forecast. You see the 2 demand forecasts by IEA. So if you look at the step scenario, which basically say energy demand is going to be quite similar to what it is today, which is probably a reasonable assumption, you see there's a lot of oil and gas still yet to be found. You look at E&P spending growth, I talked about that, 32% in 2022. And coming out of a year with such a strong growth, it's quite amazing to see that the leading 8 E&P companies in the world that guide somewhere between 12% and 23% increase in investments also in 2023. And I think that number is moving upwards every week rather than moving down. So I think there is upside to that scenario as well. Why is that? Well, if you look at my third illustration, you see the client cash flow and the integrated oil companies free cash flow in 2022, which is just record high. Some of these companies claim that we're going to spend the money now to deleverage the balance sheet and we're going to pay a higher dividend, and you name it. At the end of the day, they still need to invest in growth, and we're already starting to see the early signs of that, which is increasingly good for our business, of course. And then if you look at the last or the far right-hand side of the slide, you see the service market continues to tighten. And this is what we see in seismic, too. So basically, this is a result of ever course E&P spending outlook, where actually the majority, actually 92% of the respondents to this survey, cited varying areas of concern with service availability. And in fact, 68% of everybody who responded to this, which are basically all the oil and gas companies in the world, 68% say that service availability is the biggest concern in our business going forward in terms of meeting their production forecast. And again, I think you will see from one of my following slides, so that is a concern that is valid also for seismic. So this upcycle will be different. There is no question about that. It will be very different to the previous ones. And the reason is, number one, the multiclient market has really changed. If you look at the multiclient market size, it was about $4 billion in 2012. This dropped to about $1.7 billion in 2022. So it's about somewhere between 1/3 and 1/2 of what it used to be. But the number of companies have dropped from 11 to 4. And one of the company's TGS has now a market share of about 36% of the last 5 years' investments in multiclient. In terms of multiclient share of total seismic market, that has also increased. So that has gone up from 48% to 57%. So a smaller market, but coming back to growth. A significantly lower number of active companies. And number three, multiclient is still taking market share from proprietary. Now let's have a look at the acquisition market. So the number of active 3D streamer vessels have dropped from 58 to 15 during that same period. At the same time, the number of active vessel owners have dropped from 8 to 5. But as you all know, 2 of these 5 control about 80% of that market. But there are more companies than that, and you will see in a few seconds when I show the slide of some of the strategic initiatives TGS had taken that there are other companies as well. But again, the number of active vessel owners have dropped from 8 to 5. And then even more importantly is that ocean bottom seismic has taken significant market share from streamer seismic. So when you look at the bar chart to the left and the number of active streamer vessels, should we be concerned? Yes, perhaps a little bit, but it's not critical because at the same time, ocean bottom seismic is growing much faster than streamer. So even if the market comes back to, let's say, 70% of the capacity level that we had at the recent peak, we're probably going to be okay with a number of vessels because you will see that OBN is taking market share from streamer. And then last but not least, how has TGS done in this same period. So again, in 2012, we had a market share of about 23%. That's now 35%. The total seismic market share, it used to be 9% in 2012. It's up to about 24% in 2022, so about 1 -- or about $0.25 per dollar spent in seismic would go to TGS. And then you see our revenues are relatively flat. And obviously, that is going to change. And that is going to be the ambition of our management team, to significantly grow the revenues going forward for TGS. We are well prepared, and I think this morning was a great time to announce a few strategic projects that, again, shows that we're ahead of the game. We're planning ahead, and we're making sure that we're prepared for the upcycle. So number one, we announced a strategic collaboration with SLB in the Gulf of Mexico, and this allows the partnership of a JV to leverage the joint libraries and imaging resources across the Gulf of Mexico. If you look at the map to the left there, you see the blue stuff there. It's OBN that we've already carried out, but all the orange stuff is still yet to be acquired in terms of seismic. So for those of you who think that there is no more seismic to be acquired, that's definitely not the truth. It's a great, great strategic collaboration between 2 strong companies who are now going to work together even more closely in the future. What do we do about the vessel supply? And you saw that the number of vessel is down from mid-50s to about 15. While we signed an agreement with Cosel this morning, it secures 2D, 3D and source vessel capacity for multiple years. We're talking about now locking in capacity and rates for the next 3 to 5 years. And that's at competitive rates and terms, meaning that we're not going to see any significant change in rates over the next few years. And again, completed the acquisition of Magseis Fairfield in January 2023. It gives us a fantastic position in probably the fastest-growing area of seismic, which is 4D, ILX and OBN. So going forward, and we're going to talk about this in the presentations after myself, but we're going to continue to capitalize on M&As. We're going to continue to capitalize on the organic investments that we made. So you will see strong cash flow from TGS going forward. You will see an OBN margin improvement from synergies and operational excellence within our Magseis business. So we call it acquisition within TGS. And you will see a diversification from further growth in energy transition-related industries. And you will see 7 clearly-defined strategic priorities that we are going to deliver on and we're going to come back to the market and present the status on each one of the 7. And delivering on that strategy, we'll enable very strong cash flow generation in the future. So this one is an illustrative free cash flow potential for TGS. The way it works is we look at the pro forma of free cash flow for 2022. And then we assume in this conservative case that we have some incremental MC contribution, meaning that we invest more in the future that we invested in 2022. And if you assume that you're going to make somewhere between 1.7 and 2.3x your investments, then you have incremental cash flow coming from those investments. Then you're going to have incremental acquisition contribution. So we are going to turn Magseis into a free cash flow positive business. And then you have some costs, of course. And that cost means that our free cash flow potential in a conservative case should be slightly higher than what it is today. But the operational leverage of our business is fantastic. And if you look at this, this would be the high case or what we really would be targeting as a management team. What that shows is a significant incremental MC contribution from far higher investments. So we're guiding today that we're going to invest more than $350 million in 2023. That compares to about $220 million last year. So obviously, when we start to reap the benefits of those investments, you will see a significant contribution on our MC free cash flow. We're obviously going to turn Magseis into a positive free cash flow performer as well as part of TGS. That's going to come from synergies. It's going to come from, obviously, hard work on the operational side to streamline the business. So that's going to add additional cash flow. And then obviously, you will see that there will be incremental taxes with higher revenues, and it will be inflation to the fixed cost base. But what really strikes me with this slide is that it shows what kind of leverage we have in our business. It's not a whole lot of change that needs to take place at the existing or pretty much the existing cost base to really start to produce a lot of cash flow going forward. So again, we don't -- we deliberately don't show numbers on this, but you can kind of run that exercise yourself, and it's actually quite a simple business to calculate in that regard because these are really the key drivers to our business in terms of how we can produce cash flow going forward. So we have a management team who's going to deliver on this, and there are 2 new faces to the management team. In the upper right-hand corner, you see Joseph Hime, who's not here today, but he's a new EVP of Imaging. And then we have Carel Hooijkaas that most of you probably know from before as a previous former CEO of Magseis. But Carel is now going to be in charge of our acquisition business, which includes OBN acquisition, but it also includes all the operations from the former TGS in terms of fitting under that business unit. So you're going to see most of these people present today. So again, a fantastic management team that I think is in the best position to deliver on strategic priorities that we set out today. With that, I'm going to hand it over to Will Ashby, who is the Executive Vice President of Eastern Hemisphere. And I will come back for a summary session later this afternoon. Thank you.

Thank you, Kristian. So I'm really quite excited to present the TGS position in emerging basins. And I'll tell you why, first of all. So firstly, I mean, we really are well positioned here. When we look and I'll show you in a second, the actions we've taken to build our library covering emerging basins, we are positioned extremely well. Plus the team of people we have, the team working business development, sales, technology in these areas really positions TGS as the leading player. Secondly, we're at the start of a major multiyear upcycle. And emerging basins are going to be fundamental, fundamental for the global economy and fundamental for TGS as we look to benefit from that multiyear upcycle. So what are emerging basins? So emerging basins, I will define, as areas where our customers. Oil and gas companies are prioritizing CapEx to focus on what I'll call high-impact exploration drilling. So we're not just talking infrastructure-led exploration. Here, we're talking play-opening discoveries, discoveries of the size where they can be developed on a stand-alone basis. Okay? So that's what I'm going to cover. So let me just kick off with 2 themes kind of driving exploration in emerging basins. So first of all, energy security in Europe and Asia, and I think Scott Tinker in the first session kind of covered the big picture around this really well, and we're quite consistent in our view. So I'll just touch on the short term view in energy security here. So situation in Europe, I think we know it pretty well. If I summarize it, we have 155 bcm of Russian gas to replace in Europe, and we were very concerned coming into this winter season. And Europe has been saved by 3 things, I think. So we've been saved, number one, by the climate. It hasn't been quite as cold this winter as people feared. We've been saved, number two, by, dare I say it, consuming more coal. And number three, by LNG, and I'll come back to LNG in a second. Then let us jump to Asia. I think the energy security challenges, as Scott described, it's very much a demand-driven challenge. So we have a region emerging from COVID-19. And we see population growth, and we see economic develop driving demand a need for energy security. India is one great example. So as Scott said India is going to become the largest country in the world in just 1 months' time. It's going to hit. Was it 1.43 billion people. 85% of oil consumed by India is imported. 50% of gas consumed in India is imported. So that's a major challenge here. So the chart on the left is showing LNG or changes to LNG flows during 2022. So you see this big increase in LNG in Europe. LNG, which in the end was the big savior for Europe this year. So 45 MT coming into Europe. Where is that coming from? So 16 million tonnes was new LNG coming into the global supply system. Most of that coming from the U.S. But then look at how much LNG has been kind of sucked out of Latin America, Asia and China. It's quite significant. So the big concern here that is next winter. What's going to happen if we have a more severe winter, if it's a colder winter? And then what about China? Zero COVID policy has just ended. What's going to happen if China starts taking more LNG from the spot market again? It's a big concern here. For us and our industry, what does that mean? It means exploration. So now we're seeing a large number of oil and gas companies exploring trying to find areas where they can find more gas to feed into the global LNG system. But also we see more exploration in local markets looking to pipe gas to local markets. So for example, in Europe, we see increased interest in the Atlantic margins of the Norwegian Sea. We're now seeing growing interest again in the Barents Sea. Then all across North Africa, Mediterranean and through into Asia, significant interest to go out there and explore gas to meet that global LNG need and the local gas needs. So that's kind of the first theme driving exploration in emerging markets. And the second theme, I call finding the next Guyana. So Guyana has proven that those big, elephant-sized discoveries are still there to be made. So the chart on the right, I think, is an interesting one. So I mean the first thing that stands out to me is it is showing recoverable resources discovered going back to 2013. So first thing you can see is there's been a lack of exploration for quite some years. Second thing that jumps out to me here is we look at 2022. Actually, it's not bad 2022 discoveries. It's back on a par with 2019. Interestingly, that's been achieved with half the number of wells that was drilled in 2019. Yes, it's just 50% of the wells in 2022 versus 2019. So how does that figure out then? It was because in 2022, we saw a much higher proportion of these high-impact wells being drilled. Okay? And that's a thing that's going to continue. So in 2022, we had 28 high-impact wells drilled across the globe, and that number is going to go up to 32 this year. And a similar theme in terms of licensing rounds and acreage capture. So in 2022, in Latin America and Asia, you saw more than twice as much acreage awarded to oil and gas companies. And then looking ahead to in 2023, certainly, there's more license round activities than I've seen in my career at TGS scheduled for this year, particularly in Africa. It's a lot of activity. And I'll just add the urgency point here. So some of the European super majors have kind of constrained themselves a little bit in terms of their publicly-announced targets. If you have no new country entry from 2025, you need to act now with some urgency. But actually, we see that with almost all of our oil and gas clients. It's a real prioritization to getting through fast screening acreage, exploring, appraising, developing, get to first production as quickly as possible. Okay. So let's see how TGS is positioned in emerging basins. So I wanted to go back 10 years ago, and so you had the TGS data looked 10 years ago. So on the map here, you can see yellow reflects our 2D seismic library, and orange reflects our 3D seismic library. And we have the number of kilometers of 2D and square kilometers of 3D shown in the bar chart on the bottom left. So it's a reasonable global position, but we're dominated from a revenue perspective. We're dominated U.S., Gulf of Mexico and Europe. That's where most of the money was coming from in 2013. So a number of things have happened in over the last 10 years to grow our library. So as I animate here, keep your eyes on the bar chart on the left. So first of all, we've acquired a bunch of libraries. So here, I'm showing the libraries acquired from Polarcus, from Dolphin, from MCG and from SeaBird. And it further strengthens our library in Europe. But it's a little hard to see because of the scale. We've got a number of additional 3D data library, 3D surveys in Northwest Africa. And then cast your eyes to Australia on the map, you'll see a number of 3D surveys in Australia as a key LNG producing region. What's kind of fun here is one of those surveys was called Capreolus 3D. Just a couple of months after acquiring the Capreolus 3D survey from Polarcus, they announced what was, I think, the biggest oil discovery in Australia for the last 20 years right underneath that survey. And right now, we have a boat that's working for us in Australia that's now performing the extension to that survey, Capreolus Phase 2. So we've been acquiring that since early January, and that will complete in the next couple of weeks. So now I'll show you the Spectrum acquisition. Again, keep your eyes on the bar chart on the left, and you're going to see a big jump up here. Okay? So now out of the yellow and the orange shows the new library acquired from Spectrum, and the existing library shown in the lighter gray color. And I'm going to go back and just show that again so you can see the jump up in our library Spectrum. It is significant. So this was just after we've announced our strategy to grow our library in the South Atlantic, and now you see bringing that Spectrum library into TGS. You've got huge volumes of data all across the coast of Brazil, all the way down through into Argentina. And then move the rise over to Africa, again, significant volumes of data. But I'll highlight especially, you've got all of that data sitting over in Namibia. And you can imagine having the premier library in Namibia, it's been particularly useful for TGS over the last 12 months. That's fantastic. So now animate again, so I'm going to add on to ION and the Magseis Fairfield library. So now we gain access to all of the ION 2D-span data again, covering both sides of the Atlantic margin. In addition, we got a number of really important 3D datasets. So you see 3D data in Brazil, the Picanha surveys. You see 3D data in Northwest Africa and Mauritania. I'll also highlight the 3D data in emerging play in the North Sea, mid-North Sea High. And again, it's kind of a trend here. So this is a 3D survey, where just a couple of months after acquiring that survey from ION, we had the big discovery from Shell in the North Sea. So really good timing again for TGS. So now it's not just about acquiring companies and acquiring libraries, I'll now show you what has TGS done from an organic perspective. So our own organic multiclient investments over the last 10 years. So here you see, again, focusing on the emerging basins, you see significant data acquisition all across East Coast Canada, a key emerging basin for us. You see further acquisition, all down multiple basins in Brazil through into Argentina. And then through into Africa, you see 2D and 3D seismic acquisition and reprocessing all around Northwest Africa. And then move your eyes over into Asia. So just a couple of years ago, we had almost no data outside of Australia and the Asia Pacific region. Now we have a significant footprint covering East Coast India, Bangladesh, Indonesia, Malaysia. So TGS is really well positioned in all of these key emerging basins that I mentioned. So now I bring all that data together. So now we have the complete library shown in yellow and orange. You can see it's just a phenomenal footprint we have, covering all of these key emerging basins on both sides of the Atlantic and going into Asia. In order to show one, just one bar chart here on the bottom left of the screen. So back in the 2019 Capital Markets Day, TGS showed a very similar bar chart looking at Africa and Latin America combined, showing our revenues from 2014 to 2018, and then we announced the strategy to go grow our library in the South Atlantic. And boy, have we delivered on the strategy. You see a significant step-up in our revenues. Obviously, there's a drop-down during COVID, but now we're back up to high revenues in 2022, and this is clearly a revenue trend I expect to continue. So that's all I'm going to cover on emerging basins. But I will say, of course, in our business, you have to have the portfolio. So mature basins suggest it's important as emerging basins. And so with that, I'm going to pass to my colleague, David Hajovsky, who's going to cover the mature basins. Thank you, David.

Good afternoon, everyone, and I'm going to hear and talk to you about what TGS' strategy is to maintain our market position in mature basins. So I guess I would ask you to take your imagination a little bit. And if you're an emerging basin, you'd ask yourself, what do you want to be when you grow up? And the answer is a mature basin. Why? Because that represents success. That means you've had exploration discoveries, you've been able to build in the infrastructure and maintain a consistent level of production for a number of years. And mature basins are a very important part of the oil and gas ecosystem as they account for greater than 70% of the global production on a daily basis. Mature basins also allow us then to move into the world of ILX in advantaged oil. Because when you have the infrastructure in place, those incremental reserves allow it to be economic to find and develop that. Mature basins also from a carbon emission standpoint are some of the lowest producers in the world. If we look at the Gulf of Mexico and the North Sea, they are some of the lowest per barrel on the carbon emissions basis. So very good value-add. But mature basins also can be very important for adding new resource to the pool. As the old adage goes, it's easier to find oil where you've already found oil. So let me start with a chart here which talks about one of the most important aspects for successfully producing out of mature basin, and that's technology and the application of technology, and seismic plays a very critical role in that sense. If you look here at this chart, this is looking at a 50-year horizon in the U.S. Gulf of Mexico. And along the way, you see the different seismic acquisition and processing technologies that have been deployed to find each of those play opening pieces that you see there. So each color represents a new play that's been found and being produced. And TGS has always been on the leading edge of that, starting with 2D seismic, moving on to 3D seismic, moving into the realm of different sort of imaging algorithms to be able to resolve some of those challenges. And being able to resolve those challenges are very important for our clients because it allows them to then look at the world in new ways, and so that's what we bring in this curve here. And if you look at the very top right-hand corner, you see that we have sparse node acquisition so OBN. And that's the next technology wave that's being required here in these mature basins to allow our clients to successfully derisk the work effort they're trying to do. So what is TGS doing about that? So if you look here, we've got 2 maps. On the top, we have the U.S. Gulf of Mexico. And below that, you have the North Sea. Two highly profitable, mature basins that TGS have been operating in for a number of years. The orange data you see on those maps represents our legacy investments so that's the 3D investments that we've made over the years and have helped our clients to find and derisk their production. And then the blue polygons represent the next generation of seismic so this is the OBN that we've been building out over the course of time. And right now, in our combined library, once you get through the end of this acquisition season, we're going to have over 23,000 square kilometers of OBN data. So in the Gulf of Mexico, right now, the -- what we represent here is 16,000 square kilometers. That includes our data that's on the shelf, but then also our newest acquisitions, which have been announced, which are Amendment 2 and Engagement 3. And in the North Sea, we'll have almost 7,000 square kilometers by the end of this season with the additions of Heimdal Terrace and Sleipner, which have been previously announced. And there's future growth to be had there. And one of the things that really positions TGS well going forward in this sense is the fact that we now can offer the integrated solution. Because now with the Magseis acquisition and the ION acquisition, we're able to capture the right data from the field and to be able to process and deliver that to our client base where they can make actionable decisions on that data. It's a critical piece in order to deliver on the strategy of growth. And on that note, Kristian had mentioned the announcement of the SLB collaboration, and we're super excited about this because what this represents now is that TGS and SLB are going to jointly work together across the entire Gulf of Mexico to build out the next generation of multiclient seismic. And there is a clear need and drive here from the client base. And we think that being able to leverage one another's data libraries, our technologies, our know-how is going to help accelerate getting this data to market. Because as we've seen, we need to be able to deliver on this next gen of seismic in order to effectively produce these fields. We'll touch more on this later on through the year. One thing I would say is TGS and SLB have a very long history of working together around the world. And we've been working successfully together in the Gulf of Mexico, and this is just the next evolution in that step there. So we're very excited about what this is going to represent to TGS and to industry. And then to finish up, I wanted to talk about the other end of the spectrum, which is the data processing side and the delivery of that final image. Because with Magseis, we can acquire the data in the field, the OBN data that's required for these mature basins, but we need to be able to process it and deliver it efficiently. And at TGS, we believe that we have the right toolkit in order to do that, and you have to have the right algorithm. So we have our dynamic matching FWI, and what this algorithm allows is to build very robust velocity models and create really robust images. And why that matters? If you look at the screen here, the colored image you see is a velocity model from the U.S. Gulf of Mexico, very complex geologic regime. And then beneath that is actually a seismic image we created directly from the velocity model, and really what that means is we're accelerating the time of delivery. So in -- not in a matter of months, but in a matter of weeks, we're able to deliver the right sort of data that our clients need in order to make actionable decisions. But having the right algorithm is not enough. You need to have the right software platform in which to do the work, for which the algorithm work and then to be able to deliver the data. And this is where the benefit of the ION acquisition is so critical for TGS because now we have the Imaging AnyWare software platform. And that platform was the backbone, as Will showed there, the backbone for the Brazil Picanha 3D, Mauritania 3D, AMPc3D, very highly successful campaigns. And it's fast and sufficient. It's robust. It's intuitive. And when you combine the algorithm with the platform, you're able to turn around that data and get that to the client base in a way that they can make the decisions. So in summary, TGS is well positioned as we move forward in this space in mature basins in order to grow our market position through our integrated solutions approach. With that, I'll hand it over to my colleague, Carel Hooijkaas, who will talk to you about TGS acquisition, our newest business line and our technology portfolio. Thank you.

So good morning and good afternoon. So my name is Carel Hooijkaas, Executive Vice President for Acquisition. Today, I will cover both acquisition and technology. I want to take you back a couple of months when we started to look at how we should integrate Magseis Fairfield businesses into TGS. So we have 4 established businesses in Magseis Fairfield: OBN data acquisition, multiclient, reservoir monitoring and source, and renewables business. So as we started to look at how this could match with TGS, there were some obvious steps that we needed to make. So clearly, the TGS business could move straight into TGS multiclient. And the renewables business could go into the renewables business, the new energies business in TGS. So that's exactly what we've done, but we've done more than that. We've created an acquisition business unit that becomes the center of excellence for acquisition in TGS that covers now reservoir monitoring and source, OBN data acquisition and multiclient acquisition. And again, the multiclient acquisition is both towed streamer and OBN. So who are we now? So TGS is clearly the recognized global leader in OBN acquisition. We have 4 node crews and 3 reservoir monitoring and source crews. We work in all water depths. And like Kristian mentioned, we've performed over 100 surveys worldwide. But what does that mean? Well, it's 50% more than everybody else combined. So clearly, we are a dominant player in this space. And why is it so important what we are doing? Our customers want to make data-driven field development decisions, which means fewer wells but well-informed based on the data we have acquired. They drill fewer wells that hit the target. That's the value proposition, and that's what we do every day. Like Kristian mentioned, the seismic market continues to look into the positive direction. We saw an overall market growth of 30% in 2022. And when you look at the graph on the bottom left, you see a very good correlation between floaters and seismic market. So the floater market continues to strengthen. And therefore, our prediction is also that the seismic market will continue to strengthen going forward. And again, also, like Kristian mentioned, the percentage of overall spend in OBN continues to increase over time as you see in the bottom right-hand graph. So we're right in the right space to deliver services to our customers. And talking about our customers, let's look at the market opportunity, and let's look how our customers have adopted OBN over time. So here, you see the number of cumulative surveys acquired by our customers since the inception of OBN. So it clearly shows that a high number of customers have started to try this out. And the minute they try it once, they're hooked, and they want to do more. And it becomes the norm of what they do, and it becomes a repeat business for us. Without naming names, let's talk about the customers. So the first one was right at the inception of OBN and is now acquiring at least 3 surveys every year, repeat business and going into new fields. The #2 customer was also at the start of the application of OBN. And as you see on the slope, they are actually now on an average of 4 surveys per year. Third customer started in 2015 and is now doing 2 surveys every year very consistently. And last, but by no means least, the fourth customer example here is a customer who started in 2022 with OBN for the first time, but they have every possibility of becoming our largest OBN customer going forward. Again, once people start using it, it becomes the norm, and it becomes a repeat business for us. And we love it when our customers speak publicly about the use of OBN and the value it brings to them. This was most recently, BP, who quoted that OBN is now being deployed widely across our portfolio and giving a better view of barrels that remain. Again, data-driven field development decisions. They use our data to understand the barrels, where they are and how to extract them. That's the value proposition we bring. So as our customers start to adopt, you see all the lines going up. So what does that mean geographically? And again, Kristian alluded to this. The business very much started in the Gulf of Mexico and North Sea. And if you look on the pictures on the left, from 2005 to 2015, it was indeed very focused on U.S. Gulf of Mexico and the North Sea. And in fact, 2/3 of the global business was in those geographical areas. When you now look at 2016 to 2022, OBN has gone global. And in fact, 2/3 of the business is from outside of the Gulf of Mexico and North Sea. So again, global adoption by our customers of OBN, and that's fantastic news for us. The next question you may ask, okay, so with all these increasing trends and OBN going global, so who is doing all these surveys then for our customers? Well, we are. So TGS is by far acquiring the highest number of projects for our customers globally. So that's very clearly described here. And again, once you do these surveys, you tend to hook a customer to your services, and it locks your business in going forward. So how do we align our node inventory with the demands from our customers? That's described here on this slide, and I focus your attention on the right-hand side first on the pie charts. So there, you see the global node inventory by water depth, so deepwater, mid-water and shallow water. And you can clearly see we have focused our attention on the deepwater and mid-water and for all the right reasons. Because then I draw your attention to the graph on the left, where you can see the number of surveys acquired in these different environments. And clearly, by far, the majority is in the deepwater and mid-water. So that's precisely where we are, that's precisely where we have our nodes, and that's where we continue to have our focus. What you also see for 2023, you see the year-to-date numbers, but also the leads going forward. When you put those on top of each other, you can see that it will be almost impossible to achieve all of that. And in fact, our forecast is that we won't be able to achieve all of that.

When you put those on top of each other, you can see that it will be almost impossible to achieve all of that. And in fact, our forecast is that we won't be able to achieve all of that. There will be a shortage of nodes in the market. And some of our customers will have to shift their surveys to next year because simply the capacity won't be there. Kristian also alluded to the fact that we need to improve margins and free cash flow generation in the OBN business. And we're going to do that 3 -- in 3 buckets. So 1 is around integration synergies. We've already reduced the overhead costs significantly, and we are lowering also the financing costs. So that's number one. Clearly being part of TGS. We're at an entirely different scale with different purchasing power and the flexibility to move in the market that we previously didn't have. And last but not least, when you have customers that are screaming for our nodes and there's a shortage of nodes in the market, we obviously need to move on price. And we'll do that in the third-party market. And at the same time, we'll also leverage our internal needs with regards to the multi-client surveys we want to do ourselves. So again, looking at the picture on the right, you see a historic overview of where we've operated, so global positioning. And in red, you see where we currently have our crews. Clearly, we have an unparalleled experience with regards to OBN acquisition. We have high capacity in the key markets and the key [ water decks ] where the market is and where our customers need our services. We now have the scale to move, and we have the ability to move on price. And last but not least, we can being part of TGS, much better procure our third-party services than what we've been able to do in the past. So all in all, we are well positioned as OBN in TGS to make significant progress in the coming quarters and years. And with that, I wanted to move over to technology, and David already alluded to technology. And we're such a different company now when it comes to technology. We have so many key technologies within TGS now. And I think it's worth spending a little bit of time on the importance of technology and how it again allows our customers to make data-driven field development decisions. To do that, I want to go back to an old, old example. And you see the data -- the image quality is even bad and the data quality is bad, too. So -- but I think it makes the point -- so this was, in fact, from data from Shell that Shell has published. And what this shows is a picture on the left is [indiscernible] acquisition in the Gulf of Mexico. And based on that [indiscernible] acquisition, they drilled a well in 2004, and it was a dry well. So a big disappointment, couldn't find the reserves. We're quite convinced that there was something there, but simply couldn't find it. Shell was one of the companies that invested first in OBN and wanted to apply this new technology in one of their key basins. So they, in fact, acquired a survey in 2007, processed it. And then in 2009, drilled in that same area, but now using OBN data. And this time, they found the reserves that they were looking for. So a tremendous value proposition there. And Shell has never looked back and continues to use OBN widely to make their data-driven field development decisions. So how is TGS positioned in this space? And again, it ties so well with what David was presenting. We've as an example here, Gulf of Mexico, we have a fantastic underlying data set with the investments we've made in multi-client data. We now have our own OBN acquisition, and we have our own processing capabilities. And with that, we can make the improvements in the imaging that you see at the bottom there. We can finally show the complexities in the subsurface that are truly there and that our customers can drill on and be successful on. The story doesn't end there because through the acquisition of ION, we've now also added a Gemini low-frequency source -- and for some of you that you may know that low frequencies, people are in love with low frequencies. So having the capabilities of a low-frequency source is a fantastic addition to our overall technology portfolio. And then on top of that, we have multidimensional input output, which is basically the ability to stream data efficiently to our customers' work desk -- workstation so that they can, again, work with the data much more efficiently and much quicker than what they've been able to do in the past. All of this is powered by the TGS data and analytics capabilities. So again, the TGS from 18 months ago or 12 months ago is so different now with all these capabilities where we can really put a differentiated solution in front of our customers. And again, it allows them to make the field development decisions that they need to make. So with that, I hope I convinced you that TGS is uniquely positioned to offer unique solutions for data-driven customer decisions. We do that through technology, the integration of the technology we now have in-house. And last but not least, we will capitalize on the OBN position we have to generate OBN returns. And with that, I'll hand over to my fellow Dutchman, Jan Schoolmeesters.

Thank you, Kyle. I'm very pleased to stand there 2 years after we first announced the formation of the new Energy Solutions business unit at the Capital Markets Day that we last did and report on the progress as well as the plans going forward. So dive straight in, what is new energy solutions. And I'll show you here the 5 segments that we're focusing on between our renewables , the offshore wind, solar and geothermal but also the carbon capture and particularly sequestration is important, plus deeps minerals. So if we focus first on the renewables, I've taken the graph from the IEA to guide us on sort of the expected growth in these segments. You can see on renewables, it's a healthy growth. In fact, the IEA concluded that it's going to be a capacity build out in the next 5 years that equals that over the past 20 years, so a very healthy build out. And I've also included the compound annual growth rates here in the figures. So 25% for wind, let's start there. We make a caveat there because we put 16% that's the conclusion of our 4C Offshore Market Intelligence Unit. And they've done a full analysis very recently, studying the full supply chain, delayed projects, seeing the progress of lease rounds, et cetera. So there's a more conservative picture there. And that's 1 that we feel more comfortable with. We have developed several products and tools, and I'll go through that in a later slide. But all in all, the dots in the bottom here, show the progress and positioning that we feel we have achieved to capture that growth and to deliver relevant solutions to our clients. If we move over to solar, we have 19% compound annual growth rate. That 1 we're very comfortable with. In fact, solar has outperformed year-on-year on the expectations. So we believe that's very achievable. And we needed to make an entry into solar and that we have done through an acquisition, acquisition of Prediktor that offers ultra-solutions, asset management solutions for solar parts. So we have a good starting point there in solar, but we're not done. We want to grow further in that domain. Geothermal, a bit more modest growth, 7%, and it's not really broken through. It's a gradual increase, but we're well positioned to take that growth with our data library very relevant, particularly our well data, our seismic data. And we have high resolution based in temperature maps. So as this picks up, we will pick up the pace too. CCS, big growth, 21% expected, and that's coming from relatively humble beginnings, but certainly picking up the pace now in terms of growing. Again, we have a rich toolbox. Certainly, with the acquisition also of Magseis that we have a lot of acquisition solutions. We have our data library, of course, and we have developed analytics solutions. So we feel well positioned there as well. Lastly, Deep Sea Minerals, we show a very modest compound annual growth rate. That can quickly change if there's more clarity on legislation and how to go forward. In the meantime, we are partners in the DLA consortium where we test different types of acquisition technologies, and we're ready to go if this really picks up, and we can come to sustainable implementations. So what do we, as TGS then? We have heard that we have a certain core competence, and it's very much concentrated around data. Past 40 years, we've been gathering data. We've been organizing data. We're making sure that it is easily accessible, and that has become a big theme for our clients, easy access to data, being able to ingest it into software, getting insights, make decisions. We have built data lakes of the size of many, many petabytes and with different types of data in there, too, with our own unique format. And that works extremely well. We got a lot of interest now to expand that further. And where we see that expansion really happening will be the renewables domain. We feel that we are well positioned to combine data, combine software and application program interfaces, APIs to make it communicate with client software. And approaching and are collecting and organizing data that way, having software development on the back of it. It's all powered by our data and analytics team and that we bring to market towards the energy producers and the supply chain initially. But as a vision goes, it needs to be big, and we do believe we can grow it further towards distribution and consumers. So to make that more concrete, let me go over an example of the wind ecosystem that we've developed so far. So it started with the acquisition of a company called 4C Offshore specialized and the leading market offshore intelligence company. And with that acquisition, we immediately got access to over 400 relevant clients. So in discussion with them, understanding their needs, we realized what we needed to do next, and we started developing what we call Wind AXIOM, wind analytics platform. We collect a lot of different data on that platform, and it gives you an opportunity to look at an area, compare different lease areas, calculate the energy yield to get an indication of what are the favorable areas. Once we have seen the client interest and we've taken it around for project development, we also then deploy our own measurements to high-grade the wind models that we have on that Wind AXIOM. We do that with boys that we deploy, and we've deployed the first 1 last year in the New York bite. And we just announced today that we're going to deploy 4 more in the U.S. East Coast, and we're working on other areas at the same time. So that data then is collected over a year's time and it is bankable data, meaning it can be used to validate your project financing. That is then giving rise to the next stage, and that is NASH Renewables is a company that we're working with, and they do wind park design. It's -- we provide a seed funding to the start-up company in Germany, and they have grown quickly, and they've come up with a unique approach to a wind park design, whereby they focus on the output, meaning you don't focus on the LCRE at the lowest cost. You don't focus on maximum production all the time, but you tune it with the market pricing that you see out there. And that can mean that you produce in low wind periods, more so than you do in high wind periods. Then it's really time to start looking at the subsurface, where do we put these turbines. And then we work together with [indiscernible] Geophysics and the Norwegian Geotechnical Institute to do desktop studies to get an impression of the areas to start doing your survey design. We have a collaboration agreement with Fugro, where we provide 3D ultra high-resolution seismic solutions. They provide their geotechnical data expertise, and we work together then for clients. That's the collaboration agreement. And this is all possible, thanks to the acquisition unit that we now have with some unique technologies with Carel mentioned, people love low frequencies, but they also love high frequencies, particularly in the wind domain. Because there, you get a real good image of the shallow subservice and what potential issues there are. So this was all preconstruction. The last element that we show here is a Prediktor and that is post construction of a wind park, whereby they need to capture all the data that these turbines produce all these different sensors are being collected by a company Prediktor. They have the solutions for this to do that all real time and to pass that on to organize it and to pass it on to software. And Prediktor is a company that we acquired in July last year. We did it because we saw that they have been deployed over 1,000 installations amongst others, for instance, [indiscernible]. So meaning you have to be really reliable. Security is really important and have taken this now to other markets in the past years. And 1 of those elements is also then the asset management. I talked about data management, capturing the data, what do you do with it? So they have the Power View platform, which ingests all that data, for instance, from solar parks, where you can have the full and control, you can see the monitoring of the performance anomalies, you have the reports, you can do the analytics and basically steer your asset to make sure it produces optimum. And they've done it now for over 9 gigawatts of renewable assets is now run on this Power View platform. The Benban Solar Park was the first -- well, the largest solar park when built 1.8 gigawatt the Dogger Bank wind park still being built, hydropower in Norway, 1 gigawatt and very exciting now the development of hybrid setups, solar and batteries. So there are at the forefront of doing all these yes, data gathering, data capture and making sure we can make sense of it. So going back into the subsurface, more of the legacy skill sets that we have in the company, a very relevant then for carbon sequestration. And what we're showing here is that is really, we have all the right tools here to position for the screening element where do we find those right reservoirs. We can use our well data products. We can use seismic data, imaging. And we use that as input to a screening tool that we call Carbon AXIOM. And our clients highlight terrain areas that they're interested in, we add that to this mix. So this is an ecosystem that we're building up on the carbon sequestration. We're also part of the green sand platform, the consortium, I should say, and that is a sponsored by the Danish government, where they really focus on the full project life cycle of having carbon sequestration. So it's already now gone through all the initial stages and tomorrow will be the first injection of carbon in Denmark, and we will be present and celebrate that next phase of the project. And then in the later phases, we also have all the opportunities for monitoring surveys with the acquisition technologies that we have. And we have a collaboration with Halliburton, where we can provide fiber optic monitoring with the processing capabilities that we have. So all in all, really well positioned here as well for CCS. So in summary, we have gone about in those 2 years to really make acquisitions to get going, get access to a large client base that are relevant. We have also acquired Prediktor, which gave a new dimension of data, real-time stream data that you need to ingest into your software and combine that with our strong data and analytics team, gives really good results now to start expanding our future products from this. I mentioned the bankable wind measurements, the multi-client. We bought the multi-client model into the wind domain. And then make sure that our clients get our products earlier that they get it cheaper and it's a win-win for everyone. So we're really keen to continue expanding that and seeing more opportunities to add products to list. And now we're partnering with leading players like Fugro, for instance, in the domain. So all in all, this gives us the confidence to make the statement that we can follow that segment growth with what we have and that we can do that profitably as well. And with this sustainable approach, I also want to then lead into the ESG commitment that the company has. And Whitney Eaton will tell you all about that. Thank you.

Thank you, and good afternoon. I'm sorry. They don't make these microphones for people with dresses, so I have to put mine up here on the podium. So I apologize. Thank you, and welcome for joining us this afternoon and this morning. I am responsible for leading TGS' ESG strategy within our organization. And we are very proud of our ESG strategy, and the foundation of our strategy really is understanding our commitment and our obligation to our customers, our shareholders, our communities and our employees of our responsibility to conduct our operations in a responsible and sustainable manner. Energy demand is increasing. Whether this is solar, this is wind or this is oil and gas exploration, we understand that energy demand will be increasing, and the world and our customers have set high standards for ESG performance and have great expectations. And TGS through our ESG strategy has the ability to give customers a competitive advantage by ensuring that we conduct our operations sustainably. Whether this is upholding the highest standards when it comes to corporate governance, implementing and ensuring that our operations are conducted in a safe and responsible manner, addressing and preventing our environmental impact and investing and developing and what I truly believe is 1 of the best workforces in our industry. We're very proud of what we do. But how do we get there and how do we keep going forward? We keep going forward by addressing our environmental practices in our operations. We start well before we even touch the water or go into the land with making sure that we understand the environmental impacts and ways to strategies to address that. This begins with environmental impact assessments community outreach with fishing communities, local governments, NGOs or other organizations, deploying marine mammal observers on our vessels as well as having other measures to ensure that we are addressing and ensuring that our operations mitigate any environmental impact they may have. But we don't just feel that we can address our own environmental impact. One of the things we also do with our operations, which we believe is a true value-add to not just our industry but society is we are an active advocate of the Energy as Ghost Net Initiative. And for those who aren't familiar, this is essentially a worldwide marine ocean pollution pickup initiative that we take part of. We encourage and require each and every 1 of our projects to pick up and properly discard any pollution, fishing debris, fishing gear, marine debris and like that they recover during our operations. And as you can see last year, we actually removed 5.5 metric tons from the ocean through our operations. This is something we continue to require through our vessel providers going forward and something that we believe is actually a value add our industry gives back to the marine community. In addition, we address our climate impact. And we do so in a way that we think is both effective and productive going forward. We like to find long-term creative solutions to ensuring that we address our climate impact. We have recently had a 21% decrease in our Scope 1 and Scope 2 emissions since 2020. This is in part due to ensuring that we deploy energy efficient compute in our high-power compute and data centers. It's also by doing things like installing as you can see in the picture here, solar panels in our Houston headquarters. Our largest office to date, has solar panels in the parking lot, and that building is now 100% renewable. In addition, that building provides energy security through those solar panels to the Texas power grid. So any energy we generate in excess of what we use, we actually give back and contribute back to the Texas power grid. These are examples of ways that when we develop our ESG strategy, we're looking to make not just a meaningful impact by drive long future change within our industry and our organization. We also believe our employees are our greatest asset. We are committed to respecting the human rights around the world and providing a safe, healthy and inclusive working environment. Diversity is extremely important. Through diversity, we believe we bring innovation and success within our organization. And so we work to have an inclusive working environment by ensuring our employees understand the importance of diversity. We actively recruit diverse -- we actively recruit from diverse work pools, and we also continue to work and understand our workforce as it evolves over time. We also believe a health and safety is paramount to our operations. We -- with the acquisition of Magseis, this becomes even more important going forward. but we believe safe and healthy operations are critical to not only our success with the success of our customers. And in addition, we believe in investing into our workforce. We believe that we create the best employees to lead our company going forward. And that is shown both through the average tenure of a TGS employee, but the fact that our leadership, whether it's Director, Vice President, Executive, Senior Vice President, all come are recruited from internally or within the organization. So where do we see ourselves going forward? Where do we see the future of TGS' ESG strategy? We remain committed to ensuring that we will apply the highest over corporate governance standards in our operations. We also set KPIs that we think are practical and effective part of our strategy going forward. And we tie these KPIs, not just to our remuneration but the remuneration of our employees. So our ESG strategy sits not just with me, but it sits with the whole organization to ensure that we deliver upon our goals. We continue to put a premium on health and safety and ensuring that our operations are conducted with best-in-class safety practices, and we demand the same from our partners and suppliers. Each and every 1 of our operations has -- whether it is done by TGS or it's managed through our vessel providers follows the same health and safety practices going forward. And then finally, we continue to invest in our workforce, invest in developing our workforce and promoting an inclusive and diverse workforce, we think is critical not only to our success but the success of the industry. It is important that we increase the proportion of underrepresented groups, whether it's women, it's by race, it's by other characteristics within our organization. TGS understands that our commitment under ESG is not just to ourselves, but it's to our communities, it's to our customers, it's to our shareholders, and it has to be part of us having a successful business going forward. And with that, I will turn it over to our CFO, who will talk about our financial strategy.

Thank you for that, Whitney. I will cover the topic of financial strategy and also talk a little bit about capital allocation, and I will round off my presentation by talking about the financial reporting going forward and how we plan to do it now that we have integrated Magseis. So first, we focused a lot on return on capital employed and free cash flow in TGS simply because we -- these factors are highly correlated with total shareholder return. So if we do well on these measures over time, we will also create a lot of value for our shareholders. Therefore, we keep these measures on the back of our mind in every investment decision and every important business decision that we make. As most of you will know, we have performed pretty well on these measures over time. We normally rank pretty high up among the peer group within the energy services space and 2022 was no exception, as you can see in terms of return on capital employed. We had 13% last year, which is actually in the lower end of what we have delivered historically. So we see further upside to that. But with that 13%, we were still in the upper quartile of this defined peer group. On free cash flow conversion rate, which is simply free cash flow divided by net operating revenue, we are on the very top of the list, which we are very proud of, and we keep a very strong focus on cash, cash collection, working capital management and capital efficiency in everything we do every single day of the year. Then we have noticed that our solid balance sheet is becoming increasingly important in the energy services space. It's simply driven by the fact that traditional debt funding sources are now less available and more expensive for our industry. So as you can see from the chart on the top right-hand side there, you can see that the net debt level in the Philadelphia Oil Service Index in the U.S., which is basically an index consisting of the leading energy services companies in the U.S. has decreased quite significantly since 2018. As you know, TGS has always carried or made sure that we have a very strong balance sheet and we have always been in a net cash position, as illustrated by the chart on the bottom there. The reason why it's very important for TGS to maintain our solid balance sheet is that it allows us to do countercyclical organic investments during down cycles when vessel rates typically are low, and it enables us to have fresh data on the shelf when the upturns eventually kick in. Secondly, it also allows for inorganic investments at very attractive points in the cycle. And we have, as Kristian has alluded to already in his presentation, we have been able to do a number of M&A transactions when others have not had capital to spend, and that has paid off big time. And Kristian mentioned also ION as the latest example of that, the transaction that we did last year. And last but not least, it helps us managing the strong cyclicality in our business. We have a very high operational leverage in our industry, and we don't want to add a lot of financial leverage on top of that. And when we are on the topic of the balance sheet, I'm also happy to announce today that we have entered into a new revolving credit facility with Danske Bank and DNB of $125 million, and we are using this facility to provide financial flexibility going forward and also to repay the $45 million debt facility that we inherited from Magseis. You'll find more details about this debt facility in the appendix to this presentation. On the topic of capital allocation, we are clear that organic investments remain priority number one. We have, over the years, been able to deploy our capital organically at very attractive rates for our shareholders. And as long as we think that we can continue to do that, we will continue to put organic investments on the top of our priority list. As I discussed already, we also will prioritize maintaining a strong balance sheet for the reasons that I went through on the previous slide. Fortunately, our business model, which has a strong correlation between cash inflow and cash outflow will enable us to both invest organically, maintain a strong balance sheet and pay a healthy dividend. As you can see from the chart on the top right hand -- sorry, top left-hand corner, TGS has been able to maintain a robust dividend even during down cycles when other companies in our industries have been forced to cut dividends to zero. And then I'm going to talk a little bit about our financial reporting going forward. So first about revenues. First of all, I just want to say we are obviously going to continue to report IFRS as kind of the main set or the main numbers that we report in our quarterly reports where we are going to provide POC APMs alternative performance measures as supplemental information. However, in the presentation material that we also released every quarter, focus will be on POC numbers. And for those of you that are not familiar with the term, POC means a percentage of completion of the projects that we are doing. So we are going to report POC revenues by type. So we will report early sales which is simply a function of the multi-client investment times the early sales rate that we have in the individual projects that we invest in, in that particular quarter or in that particular period. Then [ labels ] is basically the same as in IFRS. It's the sales that we generate from our library of completed data or our vintage data and that revenue is obviously recognized at the time of the delivery of that data to the customers. And then we have the proprietary revenue line, which is basically the sales that we do of services directly to customers. And this will typically be related obviously to imaging as before, but now including Magseis, that revenue line grow significantly, as you can see the illustration on the right-hand side there. And then we are also going to report POC revenues by business unit. So we're going to give you the revenues in the multi-client business unit. And here, will lump in also imaging, although that is not multi-client but proprietary, but it's rather small anyway. We're going to report digital energy solution, Jan's business unit separately, and we're going to report data acquisition, which is Carel's business unit separately. Then on the operating cost side, we have cost of goods sold. The way I would model this is if I was an analyst is as a function of the proprietary revenues. So these are the costs other than personnel costs that can be directly attributed to our proprietary project, whether it's acquisition or whether it's imaging. Then we have personnel costs, which includes all salary and social costs but also bonuses, both short-term bonus schemes and [indiscernible] schemes and it includes also the personnel cost for the offshore workers. This cost line will probably be around plus/minus $30 million run rate per quarter going forward, including bonuses, but it will obviously vary a little bit depending on the bonus level in each quarter. But plus/minus $30 million is a good starting point for the kind of expectations you should have for that per quarter. And then other operating costs are all the other cash-related costs that are not falling into the 2 other categories. And these costs are going to vary a bit from quarter-to-quarter, but we expect the average to be plus/minus $20 million per quarter. And then by popular demand, I must say we are introducing POC amortization as well which will allow you to also calculate operating profit and pretax profit and net profit in accordance with POC and not only in accordance with IFRS. This may be a little bit complicated, but accelerate amortization in IFRS is basically the impairment that we do on a survey to align the book value of that survey at the completion the survey with the remaining -- or the present value of the remaining expected cash flow from that particular survey. And that accelerated amortization in IFRS is typically taken at the point of delivery of that survey to the relevant customers at completion. So what we do in POC amortization is that we -- and in my kind of project example on the right-hand side there, this accelerated amortization is represented by the gray -- grayish bar there. So what we do in POC amortization is simply that we take the accelerated amortization. We take the gray bar in the chart there. And we redistribute it in accordance with POC over the work-in-progress period for that particular project. So the sum of the blue bars representing the POC early sales amortization will equal the gray bar. So it's simply retiming of accelerated amortization to align with the POC of the project instead of recognizing it at a point in time. And then the straight-line amortization, which is amortization of the remaining value after completion of the project is the same in these 2 methodologies. And we have provided some historical information in the appendix on the POC amortization. And by that, I will hand the word back to Kristian, who will sum up our messages today.

Thank you very much, and it's great to see that you guys are still here. I promise it's going to be a relatively short summary because I have 3 cups of coffee and what that does for your body. So in summary, I would like to say it's been a great day. It's been fantastic to be here and share our strategies and our plans for the future. But actually, the great day for us, I started this morning when we announced 6 new strategic projects. And I think each 1 of them are so important that I'm just going to repeat very quickly right now. One of them is the SLB partnership. We've been working with SLB in the U.S. Gulf of Mexico since about 2007, I guess, and developed a very strong partnership. What we're announcing today is big. This basically is going to be the bread and butter for TGS for not the next 5 years, but we're talking 10 years, and we're talking 20 years. It's an enormous amount of data being shot in the Gulf of Mexico for the next 2 decades. And we're going to do that together with our partners. Number two, there's been some concern about vessel availability and is TGS going to have access to vessels going forward in a market where a number of vessels drops from 55 or 57 to 15. I think the agreement we announced this morning with Coastal securing us vessel capacity for the next 3 to 5 years is huge in that regard. It really is another great example of how TGS is ahead of the curve, making sure that we secure capacity before it's too late. Number three, we signed a big multi-client project in Africa. This is 1 of the biggest projects we've announced in Africa in 5 years, and it has a possible extension of the project, too. So it's just another example of how TGS is growing that business that will last be talked about today. We deployed full new LiDAR buoys in the U.S. or on the U.S. East Coast. This is an important part of our strategy to deploying 4 additional LiDAR buoys on top of what we've already done is a great achievement for that team. We also announced an extension of an OBN project in Guyana, and I think that's another great example of how a happy client continues to work with TGS when you do a good job with your clients and you have happy clients, and they keep coming back. And this is just another great example of that. And last but not least, we promised ourselves that we need to show some growth in backlog for the Capital Markets Day because we know you guys are hungry for good news, and we set the target. We need to sign some new contracts now to show growth. And I'm very happy to say that our backlog that we announced this morning is almost $550 million or about $540 million, up from about -- yes, almost 100% up since when we reported our Q4 numbers. So this is just an example of a culture of TGS that is characterized by what we say, passion, performance and teamwork. We basically set 6 targets for the team. We need to close that SLB agreement, you need to close that coastal agreement. You need to get that contract in Africa. We need to grow our backlog. We delivered on all -- it's just a sense of urgency in its management team and across the organization that is truly unique. And I'm extremely proud of showing a contract backlog that is the highest you've seen from TGS in a very, very long time, but also it means that we were allowed to increase our investment guidance for the year. We guided a range of 320 to 350 at our Q4 presentation and already in a position where we have signed up about 290 of a low end of 320. So we saw the need today to communicate that we probably -- or not probably, but we are very likely to go above the 350, which was the higher end of the range. So again, I'm very pleased about the day today, very pleased about listening to the team and seeing all of you here and obviously have a lot of people following us remotely as well. So I'm just going to summarize very quickly. The multiyear up cycle is expected to happen for all energy sources, also oil and gas, let's be very clear on that. Increased investment guidance from recent contract inflow and backlog growth. We see -- we've had several strategic milestones announced today, and I think it cannot be mentioned enough how important these milestones are for TGS going forward. And again, last but not least, the recent diversification initiatives positioned TGS for growth across the energy value chain. So with that, I want to say thank you very much. I guess we have some time for questions before we all leave. So I'm going to ask Sven and Johannes to come up here and facilitate that.

Are there any questions from the room?

I'll keep it very short questions. Christopher from SB1. On this agreement with SLB, you have cooperated with SLB for several years in ocean bottom seismic in U.S. GOM. Is the agreement today more a formalization of that continued strong cooperation you have? Or is it specific thresholds in terms of how much you plan to invest every year going forward? That's the first question. The second 1 is on the cost of vessel agreement. In my world, [indiscernible] has mainly acquired seismic for CNOC, a giant Chinese E&P company. Is it so that if CNOC doesn't need the vessel that you're allowed to use it or have this agreement secured your x amount of vessel months per year going forward, et cetera?

Thank you. Good questions. I'll start with the SLB. I mean, I think you saw from David's map that what we have acquired in terms of 3D in the -- or ocean bottom nodes in the past just covers a small, small part of the entire Gulf of Mexico, where either 1 of these companies have data. So what we've done in the new agreement is that we're basically saying that all the existing data across the U.S. Gulf of Mexico is to be shared for [ Sparsnode ] acquisition. So it doesn't mean that we buy into each other library, but it means that we can utilize the underlying data to get a much, much bigger footprint going forward. So for TGS, it's huge in terms of the entire Western Gulf of Mexico is data that TGS doesn't have today, neither in a partner with SLB, but today's agreement also gives the partnership access to that data. So I think that I'm so excited about that opportunity is that it basically regulates business going forward for the next couple of decades in terms of new acquisition of [indiscernible]. On the cost agreement, it's a -- I can't go into details about who gets what and do we get it, but I feel very good about that. This is going to sort the majority of our needs in, for example, West Africa. And then we're obviously going to use other vendors as well. I mean, as you know, we have strong partnerships with PGS in some parts of the world. We have partnerships with other companies, too, that secures vessel capacity. But this is going to cover a big need of what we need in terms of 3D capacity and possibly just as important on source vessel capacity for Magseis. So in terms of who gets what TGS and [indiscernible] or CNOC, I'm not going to go into details about that.

It's John Olaisen from ABG Collier. When it comes to multi-client investment guidance, you now say more than [ 350 mills ], how much of that is currently in the booking projects that have already been announced? Is that...

290.

290. And how much was that when you guided proposals.

Yes, 190 -- almost 200 at that stage, yes.

Right. So you booked $100 million of projects over the last 4 weeks, right? When it comes to late sales, you had a lot of good transfer fees in the first half last year in particular. I just wonder, are there any late sales coming up in Q1 and Q2 or for the rest of the second half of this year?

Transfer fees, you mean?

Transfer fees.

I hope they are late sales coming. Sorry, Yes, there's probably a couple that could close in either Q1 or Q2, but that's not comparable to the 1 that we had last year in Q2, of course, which was quite extraordinary for the entire industry.

Are they double digit? Is the one you're talking about?

They're probably in the 3 to 10 range.

3 to 10, right. And of course, you don't give -- provide guidance on late sales. And I understand very well that you don't do it. But is it possible to give some kind of indication of indication of how you expect late sales developing apart from transfer fees like year-on-year relative to your E&P spending indications, you had a chart showing that you expect it to grow at least 18%. Is it reasonable to expect your late sales number to grow with a higher number than the average E&P-spending number?

It did last year. I mean, last year, we had 30% or 32% growth in E&P spending, 30% growth in seismic spending and we grew our late sales far more than that. But obviously, now we're starting from a higher base. It's always hard to outperform that figure once again. But I think in general, we feel like we have a good data library. We have number of M&A transactions that we have carried out over the past few years that we haven't reaped the benefit from partly because of COVID and the tough market. I don't think I want to be more concrete than that, John.

And the final question is related to late sales. It's always difficult to get the sales investment ratio above 2 when you're increasing multi-client as much as you do. But I think you mentioned in the presentation that -- you still have a target of long-term sales investment ratio of 2% to 2.3%. Is it reasonable to expect that ratio in that range this year as well even with the increase in multi-client investments?

Well, I think historically, we've had a range of somewhere between 1.7 and 2.5. And I think you tend to touch the upper part of that range when you come out of years with high investments and you lower or flatten out investments. And you tend to be in the lower end of the range if you -- in the phase that we're on right now where we increase our investment. So again, I mean, we haven't seen any signs that we shouldn't be able to target to. I don't think the projects are different today compared to what they've been in the past. So I think that range is probably what you can use in your estimates.

It's difficult to get anything out of you on the late sales expectations, but...

Are you generally around for about 13 years now. And I'm not new for 13 years too.

But are you optimistic like the final try? Are you optimistic for it?

We are very optimistic about our business for '23 and the years after '23.

I note that you can also ask a question online, if you wish. One for Mick Pickup there.

Okay. It's Mickey here from Barclays. Can I just go back to -- you said that day, the IEA said no more exploration was the worst day -- and clearly, now you're presenting a picture where there's a lot of exploration. I don't know whether it's for you or for Will Ashby, but what has changed in the majors on the exploration apart from a need to get volume? Is there anything like quality of resources now being a big factor.

Yes. I mean there are so many different things. I mean, 1 of them is obviously exploration success. We've seen significant or success in 2022 and actually starting out in '23 as well. Shell announced or they didn't announce their upstream announced that Shell -- not a discovery in Namibia. I think that helps. I think the kind of overall agenda where energy is back on the agenda. Our oil and gas is back on the agenda and people realized a story that Scott Tinker was here to present today I think that also starts to sink in gradually that yes, what are we going to do after where our shareholders are happy with their dividend. Our banks are happy with us, deleveraging, then there is going to be a push for growth, and we'll start to see that too. I think in that regard, I think the message, the overall message from BP on their Capital Markets Day was very, very positive. We see the same from quite a few other companies, no names mentioned. But I think overall, we see that our IOCs are definitely coming back to exploration again. We see NOCs are continuing a gradual uptick year-over-year, and we even see smaller companies coming back. So it's really good to see.

Kevin Roger from Kepler Shale. I have 2 questions, if I may. The first 1 is related to the nodes business. You talked a lot about that. If I'm not wrong, what will matter on the note is not all the equipment can you give us a bit of color on what would be your strategy on the equipment methods present on the acquisition, if you will keep it internally or if you are ready to become an equipment provider like Sercel, for example, on the nodes. So if you can come back on what would be the strategy just on the equipment rather than the entire nodes business? And the second 1 is on M&A. You mentioned a lot also the M&A strategy that you implemented over the past years with the success that you had, the return and you notably signed a new revolving credit facility, maybe also to get a bit of flexibility in the coming years. If there is 1 business that you will target for the next 4 to 5 years that maybe you think you are missing currently, what will be this business, please?

I think on the node plans, I think we are -- first and foremost, we are going to integrate the acquisition of Magseis. We're going to make Magseis a profitable business. We're going to return positive free cash flow from Magseis. Then as you saw from Carel's slides, there is a desperate need to get more nodes out there, and we are definitely going to look into that and make sure that we can provide what the market needs, but not more than that. So we need to be controlled in that way, too. We don't want to build too many nodes and make these market oversupplied again. In terms of technologies and what's going to be done in-house versus by partners. I think in general, TGS is a company that believes in an asset-light model, which means that we're definitely going to look into partnerships on the manufacturing side and the technology side. And that's a process that we're just going through as we speak. It seems like you have a French accent, so there may be a reason for your question there, but -- that's probably 1 of the companies we would talk to in that regards. Anybody else -- on your M&A question going forward. Do you want to say a few words about.

Yes, I think we're -- we as you know, there are quite a few M&As and we're pretty happy with the position that we have. We are always looking for good transactions, particularly on the multi-client library side. But as you know, there aren't that many libraries left out there, but to the extent there are, we will, of course, be interested in looking at that. And then -- we are also -- the ambition is also to use M&A to further develop our DES business or our Digital Energy Solutions business. We did -- we have done 2 acquisitions, 1 in '21 and 1 in '22. And we take the integration efforts very seriously to get it integrated into TGS. So we are in no rush for kind of adding to that in our digital energy solutions in the short term. But in the longer term, obviously, we have further ambitions there.

Other questions? Well, with that, I want to thank you all for coming today, and great to get your attention. I see some employees here, so please get back to the office and pick up your phones. And thanks for a great day. Thank you very much.