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Veritas DGC Inc. Investor Presentation - April 2004

Veritas DGC Inc. Investor Presentation - April 2004. Forward-Looking Information.

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Veritas DGC Inc. Investor Presentation - April 2004

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  1. Veritas DGC Inc.Investor Presentation - April 2004

  2. Forward-Looking Information This presentation contains forward-looking information and statements within the meaning of the Private Securities Litigation Act of 1995 concerning among other things, Veritas DGC Inc.'s prospects and development for its operations all of which are subject to certain risks, uncertainties and assumptions, including among other things, changes in market conditions in the oil and gas industry, prices of crude oil and natural gas, weather conditions, and the Company's ability to finalize contractual arrangements. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results could vary materially from those anticipated.

  3. Land Seismic Acquisition Data Processing Data Library Veritas - A Global Provider of Integrated Geophysical Services, Geophysical Information & Reservoir Solutions

  4. Veritas – Company Strategy Continue to be a leading provider of sub surface information to the global oil and gas industry while maximizing earnings and cash flow • Invest in people, technology and operational excellence • Focus on select geographic markets • Manage for free cash flow • Continue to invest in: • R&D, Multi-Client data library and differentiating technology • Maintain financial flexibility

  5. Market Outlook • Flat to slightly improving operating environment • Contract business increasing as a percent of total market • Pricing concerns continue in segments of the contract market • Customer consolidation has slowed • Lower multi-client spending however library shelf sales continue to drive cash flow and profits • More alliance and relationship work being performed • Increasing interest in high margin products and services • advanced data processing • multi-component data • 4D surveys

  6. FY 2003 First half 2004 Contract Marine Contract Land MC Land MC Marine Revenue Mix ($ millions) $503 $252

  7. Geophysical Acquisition, Data Processing & Reservoir The “Services Business”

  8. Our Marine Business • Five 3D vessels, three Viking class, all multi streamer, all chartered • One 2D vessel • Solid streamers deployed on Vantage, Viking 1, Searcher and Viking 2 • Focus has shifted to a mix of contract and data library work • Solid Streamers are seen as a major differentiator by many customers for contract work awards

  9. Marine Acquisition Canada Gulf of Mexico Trinidad Brazil North Sea W. Africa India Asia Pacific

  10. Our Land Business • Invested in light weight and arctic-specific equipment and standardized on Sercel recording equipment • Developed multi-component recording and processing capabilities • Maintained a high volume of alliance and relationship work

  11. Land Acquisition Markets Alaska Canada US South America Oman

  12. Our Data Processing Business • An order of magnitude improvement in compute price performance • Software and algorithm innovation results in incremental gains in past year • Recent installation of latest 64 bit AMD OPTERON CPU’s • Veritas is an industry leader in sub-surface imaging technology

  13. Multi-Client Data Library“The information business”

  14. Multi-Client Business Drivers The value of Multi-Client is created by : • Geologic and hydrocarbon prospectivity • Efficient data collection and processing with un-compromised quality and turnaround • Conservative capitalization policy, amortization rates and margin assumptions • Areas with small blocks driven by government licensing rounds • Location, Location, Location

  15. Key Multi-Client Markets and Assets Europe UK 2D & 3D Norway 3D Faeroes 2D & 3D Africa Nigeria 3D Canada Foothills 3D Scotia Shelf 3D US Onshore 3D Gulf of Mexico 3D South America Brazil 2D & 3D Asia Pacific Australia 2D Indonesia 2D

  16. Multi-Client Data as of January 31, 2004 • 189,000 sq km 3D • 201,000 km 2D • Book value $348 million • Gross investment $1.3 billion • Life-to-date sales $1.6 billion • Total life-to-date booked margin 40% • Conservative library accounting

  17. FY 2003 First half 2004 Brazil Gulf of Mexico Land West Africa Other Multi-Client Revenue ($ millions) $220 $123

  18. Veritas Data Library in the GOM as of 01/31/04 GOM Investment: $500M Sales-to-date: $850M

  19. Gulf Of Mexico Lease Expiration 2004-2007 Ref. Lexco Data Systems

  20. Multi-Client Revenue Versus Investment

  21. Financial Information

  22. Current Capitalization

  23. Capital Spending 96 89 55 $ Million 31 14 2000 2001 2002 2003 2004 YTD

  24. Cash Investments $ millions 2000 2001 2002 2003 2004 YTD

  25. Recent Performance Note: Q1 2004 excludes cumulative accounting adjustment of $22.1 million. FY 2003 excludes charges of $67.7 million

  26. Why Veritas? • First class technology people and assets • Operating in politically stable areas • Data library sales continue to generate profits • Managed for positive cash flow • Low leverage • A company well positioned for the future

  27. Veritas DGC Inc.Investor Presentation - April 2004

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