Seitel, Inc., a provider of seismic data to the oil and gas industry, reported results for the fourth quarter and year ended December 31, 2013.
In a release on February 19, the Company noted that total revenue for the fourth quarter of 2013 was $59.6 million, consisting of acquisition underwriting revenue of $24.4 million, resale licensing revenue of $34.0 million and Solutions and other revenue of $1.2 million. This compares to total revenue of $70.3 million for the fourth quarter of 2012, consisting of acquisition underwriting revenue of $28.7 million, resale licensing revenue of $40.6 million and Solutions and other revenue of $1.1 million. Included in resale licensing revenue were cash resales of $31.9 million in the fourth quarter of 2013 compared to $58.4 million in the fourth quarter of 2012.
Total revenue for the year ended December 31, 2013 was $202.9 million compared to $240.5 million for 2012. Acquisition underwriting revenue was $87.3 million in 2013, reflecting 69 percent underwriting on new data acquisition projects, compared to $107.3 million in 2012, reflecting 61 percent underwriting on new data acquisition projects. The majority of our new data acquisition activity in 2013 occurred in the Eagle Ford/Woodbine, Utica/ Marcellus, Granite Wash (Panhandle Plays) and Permian (West Texas Plays) in the United States along with activity in the Cardium and Montney in Canada. Resale licensing revenue was $110.8 million for 2013 compared to $127.5 million for 2012. Cash resales in 2013 were $95.5 million compared to $136.2 million last year. Solutions and other revenue was $4.8 million for 2013 compared to $5.7 million in 2012.
"Although the fourth quarter was our strongest quarter in 2013 with cash resales totaling $31.9 million, this level of cash resales was below our expectations," commented Rob Monson, president and chief executive officer. "We believe that, overall in 2013, the North American land seismic market was soft, with E&P companies delaying their investments. Additionally, we believe E&P companies were focused on cash flow generation, directing much of their capital spending towards production drilling.
"We continue to add good, quality data to our library to allow for future growth. In 2013, we added 2,700 square miles to our data library, bringing our total 3D onshore data library to 40,000 square miles. About 20,000 square miles are located in the key unconventional plays in North America, with the majority focused in oil and liquids rich areas," stated Monson.
For the fourth quarter of 2013, our net income was $105.3 million compared to the 2012 fourth quarter net income of $19.9 million. For the year ended December 31, 2013, our net income was $113.7 million compared to $37.1 in 2012. In the fourth quarter of 2013, we recorded a full release of our valuation allowance provided against our U.S. net deferred tax assets of $100.5 million, which resulted in an increase in net income reported for the quarter and year. Net income in the fourth quarter and full year 2013 was also impacted by lower revenue, partially offset by lower amortization of seismic data, lower selling, general and administrative ("SG&A") expenses and lower interest expense as compared to the 2012 periods. Additionally, 2013 included a $1.5 million non-cash charge related to the early extinguishment of our senior notes due 2014.
Cash EBITDA, generally defined as cash resales and solutions revenue less cash operating expenses (excluding various non- recurring items), was $26.8 million in the fourth quarter of 2013 compared to $51.6 million for the fourth quarter of 2012. Cash EBITDA was $75.1 million for the year ended December 31, 2013 compared to $115.3 million in 2012.
SG&A expenses were $6.4 million in the fourth quarter of 2013 compared to $8.4 million in the fourth quarter of last year and were $26.0 million for the year ended December 31, 2013 compared to $29.1 million in 2012. The reduction in SG&A expenses between periods was primarily attributable to a decrease in annual cash incentive compensation expense and lower commissions resulting from our lower level of activity in 2013.
Gross capital expenditures for the year ended December 31, 2013 were $137.5 million, of which $126.9 million related to new data acquisition. Excluding acquisition underwriting revenue and non- cash additions, our net cash capital expenditures totaled $46.2 million for 2013.
Currently, we have set our net cash capital expenditure budget for 2014 at $35.0 million. With the investments made in our data library in recent years, we believe this level of investment will still allow for growth in cash resales in 2014 and beyond. Our current backlog of net cash capital expenditures related to acquisition programs is $14.5 million, of which we expect the majority to be incurred in 2014.
Seitel is a provider of onshore seismic data to the oil and gas industry in North America.
((Comments on this story may be sent to email@example.com))