HispanicBusiness

Tesla Canada's revenues improved with an earlier start to winter than the prior year. There were seven crews operating in November 2012, whereas in 2011, Tesla Canada didn't have seven crews operating until December. There was growth in both two-dimensional ("2D") and 3D activity days and similar utilization of Tesla's 3C equipment. Tesla Canada's gross margin benefitted from the increased operating revenues.

Tesla USA's activity declined significantly operating two crews early in the fourth quarter of 2012 including one crew utilizing the Company's Hawk system for a 2D project compared to the operation of three crews continuously throughout the fourth quarter of 2011 on large 3D programs requiring increased levels of equipment and personnel. The Hawk system was put on retainer for part of the quarter under an extended seismic services agreement with a multi-client geophysical company before being moved to Canada for the peak winter season. This decreased activity also led to a corresponding decrease in third-party contractor revenues. Tesla USA's margins improved despite the slight drop in revenues. Margins benefitted from the utilization of the Hawk system, related retainer payments and a significant reduction in rental costs.

Tesla Trinidad completed the Guayaguayare program in April of 2012. As such, no revenues were generated in the fourth quarter of 2012. Significant revenues were generated from this project in the fourth quarter of 2011 relating to front-end operations. Trinidad had limited gross margin during the fourth quarter of 2011 due to the delay in recording start up and ultimate weather shut down during December 2011.

Tesla International's revenues decreased from the comparative quarter due mainly to reduced revenues from operations in Africa. Operating activity for the fourth quarter of 2012 was driven by continuous projects in the UK and Europe for one crew and the startup of a project in Tanzania for one of the African crews. The fourth quarter of 2011 included a full workload for the UK crew along with a full quarter of operating activity, standby and demobilization charges on a program in northern Ethiopia and the startup of a lake project in the Democratic Republic of Congo ("DRC"). Tesla International's gross margin declined from the comparative quarter due to the reduced level of revenues in Africa and limited margins recognized on the extended mobilization and early phase of the Tanzania project in late 2012. The fourth quarter of 2011 had benefitted from a full quarter of operating activities in northern Ethiopia.

Tesla Offshore's activity levels improved dramatically during the fourth quarter of 2012 as compared to the fourth quarter of 2011 driven by a significant increase in geophysical activity with multiple vessels working on lump sum, day rate and deep tow projects. Tesla Offshore's gross margins improved in line with increased activity levels.

The Company's EBITDA decreased in the fourth quarter of 2012 compared to the fourth quarter of 2011 due to the growth in absolute gross margin being more than offset by increased general and administrative costs relating to additional bonus accruals and growth in business development costs. The Company incurred a small consolidated net loss in the fourth quarter of 2012 compared to consolidated net income in the fourth quarter of 2011 due to the reduced EBITDA and increased depreciation related to the Hawk system. This was partially offset by a reduction in tax expense.