Argeo AS

OSE:ARGEO

Earnings Call Transcript 2024-Q3

[Trond Crantz, executive]

Good morning, everyone, and welcome to our 3Q presentation. Today, we have a bit of an extended slide pack due to the fact that we -- this is the first quarter since our uplisting to Oslo Børs. So quite a lot of material to go through. And as per usual, we will take a Q&A session after the presentation has been completed.

So let's jump right into it. We'll start with some highlights. So the best quarter for Argeo in its history. So that's good news for everyone, I believe. We are up nearly 350% quarter-to-quarter, which is very good results. We have -- a comment on that is that we have a little shortfall about $4 million, which is related to reporting incomes due to percentage of completion, more than it has to do with payments. So this is the fact that we report our financial incomes as a percentage of completion of the projects and, thereby, a little lower than what we expected in the quarter.

EBITDA. It's an improvement of $7 million. So we ended up at $5.4 million, up from minus $1.6 million Q3 '23. EBIT, $2.6 million, an improvement of $5.5 million from last year and up from minus $2.8 million. Net profit, $0.5 million, which is an improvement of $4 million, up from minus $3.5 million in Q3 '23.

Backlog for the remaining quarter is $23 million. This has not included any sales from our Suriname multi-client projects, which will be reported as we produce from that project.

So all in all, a strong and very good project quarter. Obviously, it could even have been better, but that will obviously come in the quarter to follow.

So we included this slide just to bring some recollection year-to-date results. We have totally year-to-date Q3, $48.1 million in revenues. So that is up over 400% from last year, where we had $9.1 million. EBITDA is $12.5 million, up from minus $4.1 million. And net profit, $1.6 million, up from minus $7.5 million, and the total backlog secured year-to-date is $71 million, which is an increase of 610%. Remaining backlog, $23 million, and we'll talk about how we handle multi-clients later on.

So we show a consistent growth. We have proven our strategy. And of course, the company is shifting to profitability, obviously. The revenues are incrementally up, the same with EBITDA and net profit as well. So it's a good growth story, and we have improved, in fact, quite a lot better than what we anticipated this time in '23.

Main events in the quarter, we completed the RWE floating offshore wind project, West of California. We completed the Woodside project in Trinidad, and we also completed the AUV scope of the Total Namibia project. All of these ahead of time, on budget really, really well executed.

Subsequent events, so we entered 8-year multi-client agreement with the national energy company, Staatsolie in Suriname. We'll talk more about that later on in the presentation. We also announced a $13 million strategic equipment optimization. The details around that Odd Erik will cover in the financial section later on. And of course, Argeo successfully uplisted to Oslo Børs as we guided on early beginning of the year.

So for our new followers, let's just take a little bit of background and discuss a bit Argeo's market position and where we are, why we are there and what we are doing when we are there. This is quite important. So this map here shows our main office locations. So Oslo, of course, the headquarter; Houston, which manage the North and South Americas; Rio, which is an important deepwater market for us; and of course, Singapore for later expansion into Asia Pacific.

This also -- map shows the location of the vessels that has been running operations during the quarter. So Venture in West Africa, Namibia; Searcher in Trinidad, Gulf of Mexico, South America. And of course, Ocean Guardian for RWE, Eureka, California.

So the reason why we are located like this is because of what we are seeing coming in the deepwater segment in this decade. So it's a lot of investments going into the deepwater market, as this slide shows. Only this year, over $100 billion is going into the subsea market. And you can see from the diagrams below in the lower right-hand graph, you can see the development from 2015 until last year. Already there you see a 12% growth in ultra-deepwater market, which is where Argeo has its special purpose delivery. So all of our assets, all our vessels, all our equipment or methodology are target focused on the ultra-deepwater market. And you can see this is growing throughout the decade. Hence, as Rystad says, this will be the oil and gas deepwater decades going forward.

Africa's deepwater segment is another one, which we will cover. There is a reason why we are locating our assets in South -- North and South America and in West Africa. West Africa, Africa in general, is expected to increase between 35% to 40% by 2035. So this is a major source of supply for the energy in the oil and gas sector going forward.

If you look at what is important in that sector now in these 3 stacks, obviously, Argeo is in the subsea service section. You can see a steady growth already from last year going forward all the way into 2030. Obviously, ExxonMobil has done massive discoveries in Guyana and which is also why we are targeting Suriname, which is bordering up to Guyana with the same type of clients and customers. We have great expectations for that area. And you can see that TotalEnergies greenlit a $10 billion investment in the Gran Morgu project in Suriname.

Obviously, Namibia, where you have Portugal's Galp along with Shell and Total and others moving into Namibia as well. Adding to that, Angola, Nigeria is all high-valued markets for the services that Argeo deliver. So we say we are leading the way in the oil and gas deepwater activities, so also in the global offshore wind market.

As Rystad is commenting on, they believe that we will have significant growth in the floating offshore wind market. Now I would also admit that there are some anticipation and, let's say, judgment in terms of where the market is going, U.S. side, but Europe certainly will alone provide 70% growth in the global floating wind installation market going forward.

So also there, as we've shown with both Orsted and RWE, the expertise that we bring with the assets that we have and the technology that we develop that can be used across the segments is a highly valuable service sought after by our clients.

Then let's talk about something immature but very exciting. As most have learned by now, Norway is planning to open the licensing round for the Norwegian Continental Shelf for marine mineral exploration next year. What the industry believe is that the license round opening will be Q2 2025. It's a massively large area, over 100,000 square kilometers. As I said before in previous presentations, it would take us nearly 100 years to cover all of that area to the detail that this market requires.

I would say that Argeo has a leading expertise globally in this market when it comes to exploration. The sensor systems that we have developed has proven a very strong track record in being able to discover mineral deposits. So this is a massive uplift for the company. So we've shown that both in Norway, mid-Atlantic Ridge and, this year, in the Indian Ocean as well. So we have a very strong strategic position. We have the assets, probably the leading one in the world. And when this gets going and we believe it will be a strong industry, this will be an important segment for Argeo in the future to come.

So what is it we do in these markets? Obviously, we have the vessels, 2 of them at the moment. We equip these vessels with equipment or various kinds. We have our AUVs, which is our mainstay productive production systems that we deploy from these vessels. And on to the subsea equipment types, we install our own IP-protected sensor technology. That can be used either for identifying electrical cables, pipelines. We can use it for marine mineral exploration, detection and many other things. And we evolve continuously as a company. So we started early on with the USV, and we've done a lot of testing on that, and that will be an important factor, for instance, for Suriname and the project -- multiclient project there.

On the AUV side, we have proven our abilities for the largest clients in the world, which is -- have helped the company build a very strong track record, whereby we are accepted by almost all of the Tier 1 clients globally. And of course, the development of the company into an ROV and IMR light intervention activities is what is coming as well.

All of this supported by a digital platform, allowing us to provide data from the oceans to the clients and to our main offices seamlessly to infrastructure.

So that is why we are saying that we have a robust strategy, right? So obviously, oil and gas is the most important segment for us. It constitutes about nearly 70% of our activity. Marine mineral is an up-and-coming industry. We believe it will be very important for the economics in the world, for all of the activities we require to become a more carbon-neutral society. And that segment today consists of approximately 20%. And then we have the renewable sector, which is about 15%, where we have and are focusing mainly on the deeper water installations.

So that gives us a lot of flexibility, a lot of room to maneuver. We can use the vessels, the assets and the people across these sections as we have shown with Searcher, a good example, where we did Shell Bonga in Nigeria before we went to the Indian Ocean and did the NCPOR project for marine exploration before we again went over to Trinidad and the Woodside oil and gas project. So that just shows that we have the flexibility with very little changes to the setup and the equipment for each and all of these clients.

So superior capacity that plays on the superior AUV systems that we employ. It's the massive production units on the right-hand side, proven its course for major clients, all equipped with Argeo sensor technology. We have the containerized system, which is the Hugin 6000, which we use on project-to-project basis. So that means that it's very seasonal. We can send it and ship it all over the world and install it on a vessel opportunity for a given program. Hugin 1000, not much attention at the moment given the other large operations that we have, but it is a smaller, typically offshore wind solution as well.

And finally, Argeo Searcher, which is well proven and now a vessel which can deliver everything from geotechnical subsea activities to AUV activities and also now ROV activities as well. So it's a proper Swiss army knife in our vessel base.

Argeo Venture, most have been able to catch during the development of the company, converted vessel from seismic from -- which we bought from Shearwater, completed the conversion on approximately 2.5 months in the yard in Norway and went straight to project for TotalEnergies in Namibia.

So that is what we have. We are obviously looking at expansion. Now we can do this in many ways. We can buy and convert other vessels, or we can take vessels on time charter or on bareboat as we have done with Argeo Searcher. There is quite a flexible expansion path for us. Obviously, This will be led by business and contracts. But we account also for planning in terms of readiness, both from the cruise side, the equipment side and the vessel itself.

So pipeline, which is actually tenders. These are not leads, hard or soft leads. These are tenders that we are actively working on. This has increased from Q2 where we had $130 million in our tender pipeline. This is now at $360 million, with various projects expected to come to a decision in Q4 and Q1 next year. Some could be a bit later on in Q2, but the majority of these are over the next 2 quarters.

You can see from the graphs that we have included below that there is a lot of sanctioning going on, both in oil and gas, offshore oil and gas but also in the offshore wind market. So we expect an additional $22 billion being CapEx in '24 and currently, '25 is running at $45 billion. And you can see a distribution of clients and projects, operators and projects on the right-hand side of that graph. More or less the same thing in offshore wind. We see an additional increase in '24, with nearly 500 -- nearly $600 million, $700 million are being invested in the offshore wind segment next year.

So the distribution in the tender volume that we have is obviously driven largely by oil and gas, some in offshore wind and some in marine minerals. We are still waiting for the right moment in terms of the opening of the Norwegian sector. But that is something that we may be able to respond to quite quickly should it happen in the right way. So it would require a substantial backlog in the market to move a vessel into that space next year.

Distribution in terms of market and product revenue. So oil and gas, as I said, 64%, 19% marine minerals and 14% renewable offshore wind -- floating offshore wind. Of the activities that we've been doing, 80% is survey and inspection, and 20% is exploration. And obviously, exploration is largely marine minerals. And finally, distribution per geo market, Europe, Middle East and Africa, 56%, obviously driven by what we do in West Africa; North and South America, the second largest; and Asia Pacific, the third one. So we are looking at expanding into Asia Pacific as we move on. So it's an exciting market that has been a bit slower to react than the other segments, but we believe it will be coming full force next year.

So where are we now? Argeo Searcher completed Woodside mid-September. We did a small technical preparation, call it upgrades, and a special pipeline test for a major oil company. Then we have included some additional capability for the vessel. That was done in October before starting the Suriname multi-client project, which is expected to last until -- in January, but we do have quite a lot of optionality in continuing that, either as direct awards within the country or expansion of the multi-client activities going forward. Anyway, we expect that North and South America will occupy Searcher for next year. There is a lot of deepwater activities coming on and a lot of tenders that we are working on. So whether or not that will become Brazil, Guyana, more in Suriname and Gulf of Mexico, we'll see as the results start coming in from the tenders that we have submitted.

Argeo Venture, we could end in year-end, so late December, but the way things are going in terms of whether we had an additional time in the yard, which is largely also the reason why we are a little late on some of the revenues for Q3. Basically, all of what we have been doing so far on the Total project is paid. So it's not about payment. It's basically on percentage of completion, and that's why we spent a little more time in the yard that we had planned, which has an impact on the project itself. But in the end of the day, it's close to $40 million for 1 vessel 9 to 10 months. So it's an amazing project for Argeo to be able to do.

Regardless of that, we expect Venture to remain in West Africa for '25 and possibly also into '26. It's an important strategic market for us, and we have all the tools, all the methodology, all the experience to do that really well, and the client sees that.

The Hugin 6000 containerized system is prepared for launch on any project from Europe to North and South America, mostly focusing on offshore wind, but there are things coming in Asia Pacific, which could be interesting as well.

And finally, Argus, our USV, has been doing what we call -- it's been on our projects all summer and later, preparing the vessel. So it's a paid project, preparing the vessel for mobilization to start up with the shallow water campaign in the Suriname multi-client project. So that is the backlog review.

When it comes to operational efficiency, all vessels and assets have been doing really well. So Searcher nearly 90% utilization, 84%; performance, 92%. So it's been doing really well on the project that has been completing. Utilization for Venture is obviously 100%. It's on project, will stay there. We -- when we converted the vessel, we had to start the Total project quite early. And we knew that we had some remaining digging that needs to be do -- be done to complete the last part of the project. This was understood by the client. It was certainly understood by us. It's paid by the client. So there is no controversy there. It's just it takes a little longer time in fairly rudimentary yards in West Africa. So except for that, the vessel is operating doing well.

The Hugin 6000 is -- has completed a very exciting project for RWE in Eureka -- outside Eureka, California and mobilized on the Ocean Guardian done really well, as you can see from the client reviews as well. This has been a major uplift from them, which has, in fact, positively impacted RWE's project in itself. So 100% utilization, 95% performance.

And then finally, the Argus USV utilization is 72% in the quarter, and performance 68%. So that is the operational efficiency numbers.

When it comes to vessel asset allocation, it's as expected. I think what is to point out is that we have included another category, says days idle. This is largely the containerized system. So we use that strategically between geo markets, between countries in seasons where especially offshore wind is in play, and we can ship and send this quite easily either through airfreight or otherwise and mobilize it on a vessel opportunity. So we keep that idle. There is very little cost burn on it and has nothing to do with the other vessels. So that's why you will see that, for instance, for Q2, it came out of service. It started up on the RWE project. And of course, the RWE project went really well. So that means that we had about 46 days idle in Q3 due to completion.

The same thing for Searcher, obviously, Venture is running as per usual. Searcher has been doing really well on the project. In fact, completed most of the projects it has been assigned to ahead of time. We have spent that extra time to do small adjustments to the setup, deepwater winches, crane systems, to allow the vessel to have a larger capability within the market. And we see that what we are doing, for instance, for Total, where we have both the geophysical part from the AUV side and the geotechnical part is very appreciated by all the clients in all the markets. So we decided to give Searcher that capability.

And obviously, Searcher has started Suriname project in November, and we expect that to be running about 60 to 70 days depending on activities and possible add-ons that may come. So in total, 84% utilization for Searcher, a 100% utilization for Venture and the containerized system and nearly 50% utilization.

Okay. So what are we doing now? Argeo Searcher, as I said, on Suriname multi-client, production status on schedule. So the Suriname project is consisting of many smaller projects that allows us to report percentage of completion much quicker but also allows us to wonder in and out of that country and that area to do other, call it, contract and proprietary projects for clients nearby or in Brazil or in North America. So it's a very nice setup we have there, and we expect a lot from this project.

Production is on schedule, end of January completion, and we expect that Searcher will remain in North and South America for next year.

Argeo Venture, as I said earlier, working on Total, production status on schedule, end of this year or January next year depending on weather. So it's a very weather-prone area. But we have completed the first part of it. So now it's a geotechnical part. And we expect the vessel to remain in Africa for next year and possibly into '26 as well.

Hugin 6000 is currently idle. The next project could be North and South America. That's what we expect. There is also something coming up in, Southeast Asia. We'll report that as it comes. And obviously, do Argeo Argus, the USV, is being readied to mobilize for the Suriname multi-client project.

So this is the project status and what we call percentage of completion. So going through the projects for this year up to now. Shell, obviously, Nigeria has completed RWE, mostly completed. It's just data reporting, which is being worked on at the moment. The NCPOR project, completed. Total Namibia, we are about probably getting close to 70%. Woodside Trinidad, also completed. And we are at the moment close to 15% completed on the multi-client project in Suriname. And this is how we also report financially the projects quarter-to-quarter.

So again, when we announce new projects, we will use that setup here on the right-hand side, considerable substantial large and major, which is guided between up to $5 million for considerable, $5 million to $10 million for substantial, large project is $10 million to $30 million. And of course, a major project is above $30 million.

So I think we've covered Total Namibia itself quite well. It is obviously a massively important area for the global oil and gas industry. We see that a lot of activities are starting to move. Attention has been given to Argeo by the project that we have completed for Total. So there, we expect more news to come from Namibia and West Africa in general as well.

The Woodside Calypso project, which is tied back new development alongside already existing production areas. It's been done fantastically well. So ahead of time in essence, with very good results, very client happy. So it's a good project. We actually expected to do more, but that has been delayed, unfortunately. So we'll see whether or not more of this comes back up in Trinidad in early next year.

RWE, same story, very important project, hallmark in a way for offshore wind, quite a rugged area on the West Coast of California with a lot of weather, of course. It's a seasonal area. We are obviously looking at other projects in that same vicinity. But very happy to report that we did everything according to plan, according to budget, and we have a very happy client.

So the Suriname multi-client project. As you can see from the map here on the right-hand side, all the greenfields basically means that it's taking licenses. That is where we have operators that have secured licenses and will develop. As I mentioned before, TotalEnergies, they have greenlit USD 10.5 billion in Suriname for their activities. The expectations is that Suriname will mimic what we've seen in Guyana, all the way, in fact, over to the West African continent as well. So there is a play -- geological play between the continents, which is very exciting.

So we do a combination of activities in this area. So one thing is that we do exploration activities. So we help the oil companies in the licenses and those are coming into new licenses as well to focus their search. So we use our sensors to try and guide basically the potential uplift when we do drilling and so forth. So that's one side of it.

But we also acquired data that has a very long life span all the way into development. So that means that we acquire a lot of the same data as we do for Total in Namibia. So that means that the clients not only do they get exploration add-on data for their exploration activities, but they also get development data for the field development coming in. So that means that for the clients, they get a very good deal. And for us, it's probably 3x over typical proprietary projects in a sense. And we can continue working in this area for up to 8 years, and that is the agreement. So we work closely with Staatsolie, and we build a relationship with all of the clients in this area, and we can move in and out of the area to pick up proprietary projects in Brazil, for instance, in Guyana, in Trinidad and so forth. And when we have done this, we can come back again and continue this Suriname project.

So it's a long-term view where we have large expectations on what that can contribute to the company. So it's a strategic project, which is important, and we can additionally do and repeat that in other interesting area as well.

So -- and if we look at the value of data for our company, it is massively important as well. So we have good expectations for this agreement and what it will mean for the company in the future as well.

So 70 days, by and large, up to 150 days additionally for the USV, total 2,000 square kilometers, connected with 1,200 kilometers of tie lines in between projects. So all of our activities in this area is split up in smaller projects. So -- and since we are doing basically close to 0 turnaround in terms of processing and delivery, we can report the project as they are completed instead of waiting for the complete project to be completed. And that's a good benefit for us and our shareholders.

Technology. Argeo Listen, of course, the AUVs, the Searcher and our Argeo SCOPE has a business-to-business sales funnel to clients. So that's a really great growth story for the company.

And yes, not to forget about that, successfully uplisted to Oslo Børs. So very good. Lot of work, of course, in the back. But as we said in the beginning of this year, we estimated to be able to do this in October, and we sold it. There's been a lot of work, fantastic, great results from everyone internally and externally to the company to achieve this and well received in the market. So it's the marketplace where Argeo belong going forward. So a good move for everyone involved.

In-house technology, mostly a repetition. We focus on sensor technology that doesn't exist in the market that gives us a cutting edge. Example of that is Argeo Listen that we use in oil and gas, we use in offshore wind, and we use it in detecting deposits on marine minerals in that segment as well. So a bit like our strategy, we can use the sensor systems and our technology across our 3 verticals. Obviously, that is now matured. It's accepted by the client and has proven immensely important.

Then we have Argeo Whisper, which is the next generation of this. This is going from passive, so listen, to active listener. That means we can do even more with the same sensor. That means that we can detect unexploded ordinance for offshore wind. We can detect burial depth for electrical cables. In fact, we have an amazing accuracy in vertical detection, both for pipelines and for cables in those markets. And that is something we can build on going into a larger exploration system for marine minerals going forward.

Autonomous technology, we work closely with our suppliers on that side, obviously. And finally, and not to be forgotten is that we are probably one of the very few, if not the only one, who delivers turnkey data from the vessel on each project. So that means that the clients get the results that they expect more or less post dive in the AUV business and the ROV business and so forth. So that means that they can speed up their activities, and we can do more in our value chain.

So when we do an AUV project, for instance, as we completed for Total, we can use those data to focus the geotechnical acquisition data coming afterwards. So that has been an impressive upscaling from our clients, and we believe that this will be an important factor going on. So it's -- the vessels are really a data factory. We're only reporting taking place onshore. Additionally, we have developed an AI-based integration and interpretation system that allows us to even further speed up and the analytics process of the data that we acquired.

So that is the status, Argeo Listen, mature product in use on all our systems. Argeo Whisper being -- has finalized in sea testing now and can be installed on either an AUV or an ROV, even towed array from USV. And these are some of the things that we can use it for: tracking buried depth of dead power cables. We can do fault detection, track buried pipelines, detection of unexploded ordinance, decommissioning and so forth. So it's a very sensitive active electromagnetic tool. And then in the future, standing on their shoulders, Argeo Discover will be the mainstay marine exploration system, which is already, in fact, in use on the detection for marine minerals.

Argeo SCOPE, our digital solution, is continuing to expand and being able to do more with the data that we acquire, allows us onshore, both clients and colleagues of vessels to see and evaluate the data that has been acquired offshore. So we use that by high-speed Internet data links and allows us to see the data as soon as they arrive on board after data processing. So -- and lately, this is now also a business-to-business sales funnel for multi-client projects as well.

So I will now hand over to Odd Erik to cover the financial sector before we stop at the outlook and then take a Q&A session in the end.

[Odd Rudshaug, executive]

Yes. Thank you, Trond. So as we have heard already revenue in Q3 this year was $23 million, which is significantly up from $5.3 million, which we had in the same quarter last year. EBITDA of $5.4 million, up from minus $1.6 million in the third quarter last year. EBIT was $2.7 million from minus $2.8 million. And we recorded a net profit in the quarter on $0.5 million compared to minus $3.5 million in the same quarter last year. This net profit in this quarter includes unrealized exchange losses on $0.5 million.

Moving over to the balance sheet. We had $27 million in leased assets in the end of September. So this is right-of-use assets, as it is called, under IFRS. And it includes leasing for 2 Hugin Superior AUVs and capitalized the bareboat cost or charter payments for the vessel Argeo Searcher and office leases.

We had $48 million in property, plant and equipment. And this is mainly the vessel Argeo Venture, Hugin 6000 AUV, the Argus USV and Argeo SCOPE.

Current assets were $23 million in the end of the quarter. We had $25 million in current and noncurrent lease liabilities, $15 million in interest-bearing debt, both current and noncurrent, and $15 million in other current liabilities. Equity was $43 million.

We look at the cash flow. We started the quarter with $3 million in cash. EBITDA in Q3 was $5.4 million. But in addition to that, we had a positive effect from changes in receivables and liabilities. So cash flow from operations was $8 million in the quarter. Minus $1 million in investments, and there is also a positive effect there from proceeds coming from the sale of the 2 AUVs. We received $0.9 million of those proceeds in Q3, which was the first installment.

Financing activities, minus $4 million. So we paid $1.1 million on the leases we have, $0.9 million in the repayment of long-term debt and $1.7 million in interest payments. So this left us with the $5.5 million in cash in the end of September.

We announced this $13 million deal in strategic equipment optimization in October, as Trond mentioned earlier. So focusing on one Hugin acquisition platform will improve operational performance, and it will also reduce our cost. So we sold these 2 SeaRaptor AUVs we have. And in addition to that, we are also doing a sale and leaseback on the Hugin 6000 AUV. And that transaction on the Hugin 6000 also includes an upgrade of the unit.

Net proceeds from these 2 transactions is estimated to approximately $7.7 million after the repayment of the sellers credits and this down payment on these new Hugin 6000 AUVs.

Accounting-wise, we recorded a small loss on the sale of these 2 SeaRaptor AUVs in the third quarter. It was $80,000 approximately. And this Hugin 6000 sale leaseback will be treated as a loan in the same way as we do with Argeo Venture, the loan we have on Argeo Venture today.

These proceeds from the sales, I mentioned that $0.9 million was received in the third quarter. We will receive approximately $6 million now in Q4 and the last installment of $0.9 million in Q1 next year.

So then I think Trond will talk a bit about the outlook before we have questions.

[Trond Crantz, executive]

Yes, we can just cover this quite quickly. I've covered most of it already. We expect a boom in the deepwater project investments going forward. We believe this is going to be a super strong decade for deepwater projects. We see Africa, North and South America to be an important place in that space. We see the offshore wind coming and more and more force when it comes to floating, where Europe will be notably the leading geo market. And of course, Norway's first licensing round for marine mineral exploration. So that is the market side of things, and that is why we are where we are and do what we do. We have positioned ourselves to capitalize on all of these activities coming forward.

Argeo Searcher, we expect to keep in North and South America. As I said, if we get a fairly big and must be a sizable exploration campaign in Norway, we will evaluate bringing it to Norway for the summer season. But otherwise from that, it will remain in North and South America.

Argeo Venture, finishing sometime between early to late January. We remain -- expect the vessel to remain in Africa, mostly West Africa, of course, and stay there for a long time. It's an important market, and a lot of field development is ongoing in West Africa.

So that is basically where we are. We continue having focus on innovation, both in what we do and how we do things, but also in the technology, of course. All of this to strengthen our leadership globally.

Then we can take questions.

[Unknown Attendee]

Yes, there's come in quite a few questions today. We'll start with the first one. How do you view the dividend potential of Argeo in 1 to 2 years?

[Odd Rudshaug, executive]

I think the strategy is to grow the company and to invest into new assets, new assets. So I think that is what we will spend our excess cash on and not dividends in the short term.

[Unknown Attendee]

And the next couple of questions is on tender activity. An impressive tender volume of USD 360 million show strong activity. How much of this are you hoping to secure in the near future?

[Trond Crantz, executive]

Well, so we haven't weighted this in the presentation because that would obviously be guiding. But as we have shown, we have an ability to secure large contracts in the markets where we operate. So we have a strong fit in our activities when it comes to tenders.

[Unknown Attendee]

And your tender pipe grew quite significantly in the quarter. Can you give some color on where regionally most of this tender increase is coming from?

[Trond Crantz, executive]

Yes. It is basically replicating the outlook here. It's North and South America, and it is West Africa. So that is the significant bulk of it. Now we do see that Asia Pacific is coming. We can't capitalize on that, but it's a developing market for us. We don't have any large activities there outside of India. So -- but by and large, it's a good split between especially South America and, of course, West Africa.

[Unknown Attendee]

And finally on tender. Have you lost any tenders recently? If so, can you say which ones and why did you not win?

[Trond Crantz, executive]

Yes. So we have lost -- lost, I don't know if it's the right word, but we have a couple of small sort of $2 million to $3 million project in the Gulf of Mexico, which was not awarded to Argeo, mostly due to the fact that the vessel was quite far away, quite homogeneous competition out of Galveston. So I would say it was mostly a price matter anything else. Nothing that we are extremely sorry to lose either. I think the more disappointing thing is that we've had a couple of fairly sizable projects, which we expected would come in South America a little bit earlier. That is now somewhat delayed. So we'll see how far to the right these projects are pushed, but we expect to have more visibility on this probably mid- to late Q1, and we believe we are a leading player in those tenders.

[Unknown Attendee]

How close are you to achieving a third spread?

[Trond Crantz, executive]

I would say quite close. It depends on how we do it. Obviously, the reason why it takes a longer time is that we have been trying to do it quite lean. But if -- the possibilities are there. We know what we have to do. We have a good visibility on the financing side of it. And then it's just tying that to company growth and our activities going forward. It's -- now we have a lot of AUVs. Whether or not we add to that with ROVs and so forth that also has a play into it with lead times on equipment and so forth. So it's more of a complex thing to answer than just sort of a straight so many months and so many weeks and so forth. But it's -- we have a good track on the process.

[Unknown Attendee]

Here's a question on the multi-client project. Can you say anything about what the multi-client CapEx is and prefunding on the Suriname agreement?

[Odd Rudshaug, executive]

No, I think we need to come back to that in the Q4 report, how much we invest into that multi-client project. In the vessel schedule we looked at earlier, the project goes into January. So there will be 2, 3 months with the vessel costs capitalized to the balance sheet. But we don't want to -- yes, guide on any numbers.

[Trond Crantz, executive]

And depreciation of data, 7 years?

[Odd Rudshaug, executive]

Between 4 and 7, that hasn't been termed yet.

[Trond Crantz, executive]

And also, I think we can add while we're on that topic that we are -- it's not one large project, right? So it's many smaller projects that we can report a percentage of completion on quicker.

[Unknown Attendee]

Another question from the net. Congratulations on yet another great quarter. You're showing impressive progress in the numbers and your technology is proving its worth. How long do you think you'll be able to operate undisturbed before a potential player attempts to acquire your technology and expertise?

[Trond Crantz, executive]

Yes. Well, that's a difficult question to answer. Obviously, I think the more we disturb existing larger players, obviously, that focus rises, no question. But at the same time, we have quite a steady, substantial ownership within the company as well, right? So yes, that's really all I can say. There is no -- we are not building the company for sale. We are building it to become a substantial industrial player.

[Unknown Attendee]

Is -- well, we have time for 1 or 2 more, I think. How much do you expect to receive in Q4 related to the sale of noncore assets, given that some was received in Q3?

[Odd Rudshaug, executive]

I think we covered that in the presentation. We received $0.9 million in Q3. We will receive approximately $6 million in the fourth quarter and $0.9 million in Q1.

[Unknown Attendee]

I think we have just time for one more. How do you recruit top talent into the organization?

[Trond Crantz, executive]

Well, yes, so that's a good question, right? I think Argeo is a very attractive company. And we can see that we haven't had any challenges getting the people we need to carry out the operations. And I think that also reflects the project performance that it is actually a very talented bunch of people, both on the vessels and onshore in the various offices. So I think we are doing really well. We have a good team, and of course, good people follow good people. So I would say it's going well at the moment.

[Unknown Attendee]

And for those questions that weren't answered, we will do that in an e-mail when we come back to the office.

[Trond Crantz, executive]

Thank you.