Odyssey Marine Exploration, Inc. (NASDAQ:OMEX), a pioneer in the
field of deep-ocean exploration, reported results for the second
quarter ended June 30, 2017, and provided an update on operations
and plans for 2017.
In the second quarter, Odyssey’s marine operations team
successfully completed the first phase of a major shipwreck project
that included the search and inspection of multiple valuable
targets and the recovery of samples of valuable cargo. These
activities were undertaken under contract with another party.
Planning is currently underway for the recovery phase of this
project. Procurement of specialized equipment for the recovery
project has been initiated, and operations will commence upon
delivery and the completion of testing of the new equipment.
Planning also continues for recovery of
phosphate sands from the “Don Diego” project so that preliminary
operations can commence soon after environmental approval is
received. Odyssey has already been contracted to provide a variety
of services related to this the project once approvals are in
place. This contract has the potential to produce several million
dollars in positive cashflows and enhance the value of Odyssey’s
investment in this project. Although there can be no assurance of a
favorable outcome, the judicial decision on the environmental
approval is expected to be made within the next 90 days.
Odyssey also continues to develop and partner
with other groups on new subsea mineral projects that will require
offshore exploration work and resource evaluation by the Odyssey
marine operations team.
The currently planned shipwreck and mineral
projects are being conducted under a leveraged contracting model
where Odyssey is paid to perform offshore services while retaining
a significant back-end of the future net proceeds from the
projects. The combined potential cash flows generated from these
projects are expected to fund operations for multiple years and
increase the value of projects controlled by Odyssey or in which
Odyssey has an equity ownership position.
Odyssey’s interests remain aligned with those of
MINOSA del Norte S.A. de C.V. (MINOSA), with whom we have an
investment agreement for the purchase of new equity securities
that, when issued, would represent a majority of the equity in
Odyssey. Epsilon Acquisitions LLC, an affiliate of MINOSA, is
already one of Odyssey’s largest shareholders after converting $3
million in debt to equity in the second quarter of 2017.
In addition, Odyssey was notified by NASDAQ on
August 4, 2017, that the Company is in compliance with all NASDAQ
requirements for listing.
Management Commentary “As we transform Odyssey,
we’ve been working to be more efficient and focused while driving
cash flows to fund operations. Those efforts are continuing to pay
off with a 25% reduction in general and administrative
expenses and a 20% reduction in operational expenses comparing the
two 12-month periods ended June 30, 2017 and June 30, 2016.
That’s on top of the 36% reduction in those expenses from the prior
12-month period ended June 30, 2015,” said Mark Gordon, Odyssey
Chief Executive Officer and President. “We also now have the
largest pipeline of cash generating projects than at any other time
in our history.”
“These efforts have also positioned Odyssey to quickly commence
operations on the ‘Don Diego’ project once approvals are received
and have allowed Odyssey to continue developing new mineral
projects around the world.
“The ‘Don Diego’ environmental approval process and closing of
the Stock Purchase Agreement has taken longer than originally
contemplated; however, the assistance MINOSA has provided us
through this process and their recent agreement to provide
additional capital reinforces our belief that MINOSA is the right
investor for Odyssey’s offshore mineral exploration business,”
continued Mark Gordon.
Q2 2017 Financial Summary
The net loss in the second quarter of 2017 was $1.9 million or
$(0.23) per share as compared to net loss in the first quarter of
2017 of $2.2 million or $(0.28) per share and a net loss or $1.9
million or $(0.25) per share in the second quarter of 2016.
Total revenue in the current quarter was $0.6 million, a $0.6
million decrease from the revenue in the same period a year ago and
was derived from the performance of expedition marine survey and
recovery services for Magellan, whom we consider a related
party. The $1.2 million revenue in the same quarter last year
was generated from providing equipment and personnel to an offshore
operator under a survey expedition services agreement.
Marketing, general and administrative expenses
decreased by $0.2 million from $1.9 million in 2016 to $1.7 million
in 2017 primarily as a result of (i) a reduction of $0.4 million of
personnel compensation and related expenses including share-based
compensation of $0.2 million and (ii) $0.1 million decrease in
corporate supportive overhead. This decrease was partially
offset by (i) a $0.2 million increase in legal fees related to
marine cargo securitization and (ii) a $0.1 million increase in
financing fees.
Operations and research expenses primarily
include all costs within Archaeology, Conservation, Exhibits,
Research, and Marine operations, which include all vessel and
charter operations. Operations and research expenses
decreased by $0.4 million from 2016 to 2017 as a result of a $0.1
million reduction of marine services costs which include technical
crew costs as well as other marine operational costs such as fuel,
port fees and consumables, an increase in the gain of sale of
marine equipment of $0.2 million and a reduction of $0.1 million of
fixed asset costs related to depreciation and insurance. 2016
included the full-time operations of our former vessel, the Odyssey
Explorer, which was sold in mid-2016.
Consolidated financial statements as well as the Company's
Quarterly Report on Form 10-Q for the three months ended June 30,
2017, are available on the company's website at
www.odysseymarine.com as well as at www.sec.gov.
About Odyssey Marine Exploration Odyssey Marine
Exploration, Inc. (Nasdaq:OMEX) is engaged in deep-ocean
exploration using innovative methods and state of-the-art
technology for shipwreck projects and mineral exploration. For
additional details, please visit www.odysseymarine.com.
Forward Looking Information Odyssey Marine
Exploration believes the information set forth in this Press
Release may include "forward looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Act of 1934. Certain factors that could cause results to differ
materially from those projected in the forward-looking statements
are set forth in "Risk Factors" in Part I, Item 1A of the Company's
Annual Report on Form 10-K for the year ended December 31, 2016,
which was filed with the Securities and Exchange Commission on
March 30, 2017. The financial and operating projections as well as
estimates of mining assets are based solely on the assumptions
developed by Odyssey that it believes are reasonable based upon
information available to Odyssey as of the date of this release.
All projections and estimates are subject to material
uncertainties, and should not be viewed as a prediction or an
assurance of actual future performance. The validity and accuracy
of Odyssey's projections will depend upon unpredictable future
events, many of which are beyond Odyssey's control and,
accordingly, no assurance can be given that Odyssey's assumptions
will prove true or that its projected results will be achieved.
Cautionary Note to U.S. Investors The U.S.
Securities and Exchange Commission (SEC) permits mining companies,
in their filings with the SEC, to disclose only those mineral
deposits that a company can economically and legally extract or
produce. We use certain terms in this press release, such as
"measured", "indicated," "inferred" and "resources," which the SEC
guidelines strictly prohibit us from including in our filings with
the SEC. "Inferred mineral resources" have a great amount of
uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an inferred mineral resource will ever be upgraded
to a higher category. U.S. investors are cautioned not to assume
that part or all of the inferred mineral resource exists, or is
economically or legally mineable, and are urged to consider closely
the disclosures in our Form 10-K which may be secured from us or
from the SEC's website at http://www.sec.gov/edgar.shtml.
MEDIA CONTACT:
Liz Shows
Odyssey Marine Exploration, Inc.
(813) 876-1776 x 2335
lshows@odysseymarine.com
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