Axxis Geo Solutions Announces Q3 2020 Results

Source: www.gulfoilandgas.com 11/30/2020, Location: Europe

HIGHLIGHTS Q3 2020
• OBN surveys in the North Sea and the Middle East were successfully completed
• USD 34.2 million of accounts payable converted to interest bearing debt
• Smart-stack cost-reduction solutions implemented in accordance with communicated business strategy
• New CEO appointed
• First late sales from the Utsira multi-client library secured

SUBSEQUENT EVENTS
• New contract with an international energy company for OBN work in the North Sea in Q2 2021 secured
• Discussions with stakeholders initiated in order to improve the company’s financial position

CEO STATEMENT
“The challenges resulting from the COVID-19 pandemic continued in Q3 2020. Nevertheless, our crews successfully completed the projects in Egypt and Norway without incident and to our clients’ full satisfaction. Furthermore, AGS has recently entered into a contract with an international energy company for OBN work in the North Sea scheduled to start in Q2-21, with an estimated duration of one month. We also took final delivery of the Utsira multi-client data and secured two licensing agreements in cooperation with our partner TGS.

However, due to the difficult market conditions, we have to date been unsuccessful in securing work for our crews in Q4-20 and Q1-21 as start dates for projects have been moved out in time. Smart-stack solutions have been implemented in order to reduce costs to a minimum.

Due to the lack of revenue, we are unable to address our current debt obligations. Consequently, we are in active dialogue with stakeholders to address the Company’s debt situation and improve its balance sheet,” says Ronny Bøhn, CEO of Axxis Geo Solutions.

ADDITIONAL INFORMATION
As further set out in the Q3 earnings release, AGS finds that it is in the interest of all its stakeholders to continue as a going concern. AGS will have to address the Company’s debt situation and improve its balance sheet through a capital restructuring, which is likely to result in limited value being attributed to the current shareholders. Upon successfully completing a capital restructuring, the Company should be well positioned to attract additional capital as required.

AGS is in advanced discussions with several of its largest creditors and other stakeholders with the objective of agreeing on a pre-arranged debt restructuring plan and raising additional capital. As of today, the Company is not servicing its debt.

Given the ongoing discussions as referenced above, which include discussions with the largest bondholders, AGS has decided not to pay interest under the Axxis Geo Solutions ASA 8.00% senior secured USD 35,000,000 bonds 2020/2022 (ISIN NO 001 0887383) (the "Bonds"). AGS has received confirmation from bondholders holding in excess of 2/3 of the Bond that they will support a waiver and an amendment allowing for the interest that should have been paid 30 November 2020 to be settled with PIK bonds.


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