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Annual Shareholder
Meeting
June 24, 2008
Meeting
June 24, 2008
Strong Experience - Focused Growth - Managing Risk
![](https://capedge.com/proxy/8-K/0000314606-08-000012/ex99-12.jpg)
Forward-Looking Statements
Ш This presentation contains forward-looking statements.
Ш Forward-looking statements are based on management
assumptions and analyses.
assumptions and analyses.
Ш Actual experience may differ and such differences may
be material.
be material.
Ш Backlog consists of written orders and estimates for our
services which we believe to be firm. In many instances
contracts are cancelable by customers so we may never
realize some or all of our backlog, which may lead to
lower than expected financial performance.
services which we believe to be firm. In many instances
contracts are cancelable by customers so we may never
realize some or all of our backlog, which may lead to
lower than expected financial performance.
Ш Forward-looking statements are subject to uncertainties
and risks which are disclosed in Geokinetics’ Annual
Report on Form 10-K.
and risks which are disclosed in Geokinetics’ Annual
Report on Form 10-K.
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Exploit
Seismic Data Acquisition and Processing
Needed at All Stages of the E&P Cycle
“With 3-D seismic, we can understand the detailed geology much
better than before. And that translates to opportunities to drill new
wells to bolster production in mature fields.”
- ExxonMobil, The Lamp (2007 - Number 4)
better than before. And that translates to opportunities to drill new
wells to bolster production in mature fields.”
- ExxonMobil, The Lamp (2007 - Number 4)
Ш Increase drilling success rates
Ш Reduce finding and development costs
E&P Project Cycle
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Company | Data Acquisition | M-C Data Library | Data Proc & Interp | Eqpmt. | Seismic Crews | ||||
Marine Streamer | Land | TZ | OBC | Intl | US | ||||
Geokinetics | | | | | | | |||
Dawson | | | | ||||||
Tidelands | | | | ||||||
PGS | | | | | | | |||
BGP | | | | | | | |||
CGGVeritas (Sercel) | | | | | | | | | |
WesternGeco (Schlumberger) | | | | | | | | | |
Mitcham | | ||||||||
ION Geophysical | | | | ||||||
Bolt Technologies | | ||||||||
OYO Geospace | |
Geophysical Market
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Strong Customer Relationships
(Partial Customer List)
(Partial Customer List)
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Continue to
Leverage
Competitive Advantage
Grow Customer Base
& Expand into New
Markets
& Expand into New
Markets
Strengthen
Complementary
Service Offerings
Complementary
Service Offerings
ШLeverage competitive advantage and expertise in
difficult land environments and offshore shallow water
zones to maximize profitability.
difficult land environments and offshore shallow water
zones to maximize profitability.
ШBetter assist customers with full range of seismic
services, from acquisition and processing to
interpretation and management.
services, from acquisition and processing to
interpretation and management.
ШPresence in 18 of 194 countries worldwide. Further
expand geographic presence and services offered.
expand geographic presence and services offered.
Pursue Strategic
Acquisitions / Alliances
As Appropriate
Acquisitions / Alliances
As Appropriate
ШContinue to monitor opportunities for prudent
expansion.
expansion.
Capture New Market
Opportunities
Opportunities
ШLeverage operational expertise to pursue
opportunities in complementary markets such as OBC
opportunities in complementary markets such as OBC
Growth Strategy
![](https://capedge.com/proxy/8-K/0000314606-08-000012/ex99-17.jpg)
Strong Experience - Focused Growth - Managing Risk
Operational Experience & Focus
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Global Operations Map
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Processing & Interpretation
Strategy
Strategy
Ш Reorganization complete - benefits being realized
Ш Complement acquisition, both in onshore and in
offshore shallow water environments
offshore shallow water environments
Ш Enhance multi-component processing capabilities
Ш Enhance 4D processing techniques
Ш Improve profitability through direct awards
– Recent success with new clients
![](https://capedge.com/proxy/8-K/0000314606-08-000012/ex99-110.jpg)
North American Operations -
Canada
Canada
Ш Operated five land crews during Canadian winter (1Q ‘08)
Ш Three ION Vectorseis crews, two Sercel 428/408 crews
Ш Leader in proprietary multi-component data acquisition
Ш Sercel equipment to move internationally for Summer
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North American Operations -
United States
United States
Ш Operate up to 8 land crews all year
Ш ION RSR, Sercel 428 / 408 and Aram Aries
Ш Experience throughout U.S.
Ш Competitive advantage in TX & LA swamp/marsh regions
Ш Processing center in Houston, Texas
![](https://capedge.com/proxy/8-K/0000314606-08-000012/ex99-112.jpg)
International Operations -
Latin America
Latin America
Ш Operate up to 6 land crews all year
Ш Sercel 428 / 408 and Aram Aries
Ш Near-term operations in Bolivia, Brazil, Colombia and
Suriname
Suriname
Ш Market leader in Colombia with 19 years
continuous presence
continuous presence
Ш 40 years experience in Brazil with continuous presence
since 2000
since 2000
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International Operations -
Eastern Hemisphere
Eastern Hemisphere
Ш Operate up to 3 land crews, 3 transition zone crews and
1 OBC crew
1 OBC crew
Ш Sercel SeaRay, Aram Aries, Sercel 408
Ш Near-term operations in Angola, Australia, New Zealand,
Bangladesh, Egypt, Tanzania and Mozambique
Bangladesh, Egypt, Tanzania and Mozambique
Ш Market leader in transition zone
Ш Sole provider of Sercel SeaRay
Ш Processing center in London (Woking), England
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Strong Experience - Focused Growth - Managing Risk
Financial Strength
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Investing for Growth
Ш Invested $95 million in 2007:
– New state-of-the-art equipment
(67% received in second half of year)
(67% received in second half of year)
– Expanded recording capacity
– Entered OBC market
– Upgraded US crews
Ш 2008 capital expenditure budget of $65
million*, $40 million invested through May ‘08
million*, $40 million invested through May ‘08
Ш 118,000 channels at 3/31/08 vs. 94,000
channels at 3/31/07, a 20% increase
channels at 3/31/07, a 20% increase
Ш Maintenance CAPEX averages 3% to 4%
of revenues
of revenues
Ш Capital investment decisions are based
on an average expected payback of
less than three years EBITDA
on an average expected payback of
less than three years EBITDA
*Subject to amendment to loan covenants
Sercel SeaRay
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Near-Term Growth
Ш Quarterly record
seismic data
acquisition and data
processing backlog
of $417 million as of
March 31, 2008
seismic data
acquisition and data
processing backlog
of $417 million as of
March 31, 2008
Ш Substantial amount of
2008 covered by
current backlog,
remainder to be
completed in 2009 and
2010
2008 covered by
current backlog,
remainder to be
completed in 2009 and
2010
311
283
321
381*
*Includes a $59 million job in Argentina which has been removed from current
backlog due to continued delays and uncertainty.
backlog due to continued delays and uncertainty.
411*
Backlog Trend
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Pro Forma By Quarter
Ш Seasonality is prevalent in operations
– Results from a variety of factors including Canadian working season in 1Q and thaw in 2Q,
and the budgeting cycle of international companies
and the budgeting cycle of international companies
Ш 2Q07 impacted primarily by severe weather in the U.S. and a job being declared force majeure
Ш Quarterly volatility reflects varying crew profitability due to fluctuations in size, job, location,
utilization of crews and the timing of crew moves
utilization of crews and the timing of crew moves
Quarterly Pro Forma Revenue
Quarterly Pro Forma Adjusted EBITDA
($ in millions)
($ in millions)
Note: Adjusted EBITDA reflects $727k of Grant’s Abandoned IPO expenses and $12.9 million of expenses related to the Grant Acquisition consisting primarily of investment advisor and professional
fees, payout under phantom stock plan and completion bonuses which are added back in 3Q06 as well as $3.2 million of one-time severance costs in 3Q07.
fees, payout under phantom stock plan and completion bonuses which are added back in 3Q06 as well as $3.2 million of one-time severance costs in 3Q07.
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Why Own GOK?
Ш Record backlog provides visible growth through 2008
and into 2009
and into 2009
Ш Leader in high-value transition zone/OBC niche
Ш Improving data acquisition operating margins
Ш Integration of acquired companies substantially complete
Ш Recent investments of $121 MM in new revenue-generating
equipment and upgrades
equipment and upgrades
Ш Solid domestic operations with strong
international upside
international upside
Ш First-mover advantage in large markets with
long-term visibility (Australia and Angola)
long-term visibility (Australia and Angola)
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Annual Shareholder
Meeting
June 24, 2008
Meeting
June 24, 2008
Strong Experience - Focused Growth - Managing Risk