Carbon Transition : 2023 Q1 Carbon Transition Earnings release

Q1 2023

Earnings

Release

CONTENTS

1	CEO statement	3
2	Key events during the quarter	4
3	Subsequent events after the quarter	4
4	Key financial indicators	5
5	Business overview	5
	5.1.	Multi-client	5
	5.2.	Investments	7
6	Outlook	8
7	Board of directors' financial review	9
8	Financial statements	12
	8.1. Interim consolidated statement of comprehensive income	12
	8.2. Interim consolidated statement of financial position	13
	8.3. Interim consolidated statement of changes in equity	14
	8.4. Interim consolidated statement of cash flow	15
9	Notes to the interim consolidated financial statements	16

2

1 CEO statement

The energy sector was volatile given uncertainty in the financial markets during the first quarter of 2023. Persistent high inflation has caused fears of further monetary tightening and thus an increased risk of economic recessions around the world.

Recent bank failures have exacerbated market concerns. With this as a backdrop, we believe oil and gas companies will be targeted in their investment decisions.

We continue to experience strong activity in producing energy fields. Oil and gas companies are prioritizing investments which optimize existing infrastructure and investment activity is robust. This investment trend fits very well with our multi-client seismic assets, which are targeting active production areas in the North Sea and the Gulf of Suez. Nevertheless, although we see solid market fundamentals, timing of multi-client late sales is unpredictable. We should expect sales to be lumpy and this does not speak to the long-term underlying values and future sales potential.

The reprocessing of the Utsira ocean-bottom node survey in the North Sea is progressing according to schedule and cost. The new products will provide significantly improved subsurface imaging, which will be critical in making future drilling decisions in the area. The substantial uplift in the reprocessed data will not only provide a new revenue stream to the company but will also boost demand for the underlying data. It is a requirement for customers to own the underlying data set before they may acquire the reprocessed product.

In the first quarter we started recognizing revenues from the Utsira reprocessing project and this will continue at different amounts in the coming quarters throughout the reprocessing phase. For the quarter, reprocessing revenues represented USD 2.4 million. In addition, we have multi-client late sales from our existing portfolio.

In the Gulf of Suez, we expect a well to be drilled in Egypt's Northwest El Amal concession in the southern Gulf of Suez. The well, targeting the Yakoot structural trap in shallow water, follows the acquisition of the multi-client OBN seismic data in 2020. According to the operator, several other leads and prospects have been identified in the license, providing further upside potential.

For the investment portfolio, we report a gain of USD 0.8 million in the quarter. Dolphin Drilling commenced operations in Nigeria on its first one-year contract for the Blackford Dolphin. Following the completion of this contract, the rig will continue onto its second Nigeria contract with a duration of up to 485 days. The market for semi- submersible rigs is currently very tight and we expect to see strong demand from the oil companies.

Capsol Technologies is continuing to expand its footprint. During the quarter, the company's 12-month campaign with a major German energy producer was scheduled to commence. The company was also recently selected to conduct new feasibility and FEED studies for waste-to-energy facilities in Switzerland, Sweden and the United States. Capsol Technologies also expanded its service offering by introducing a

3

liquefaction unit that can be used in conjunction with the CapsolGo demonstration system. The company signed a rental and service contract for the delivery of this unit.

We are continuously evaluating potential investments and can take advantage of uncertain financial markets should value-adding opportunities arise. Our main objective is to increase shareholder value, and we will take a cautious but opportunistic approach to our investment portfolio.

In the first quarter, we announced the repurchase of 10.0 million shares. This was in addition to the 5.3 million shares we purchased in September 2022. Both these transactions were executed at prices significantly below the company's net asset value and were highly accretive to shareholders. We will continue to evaluate share repurchases going forward.

Cash net income for the period was USD 0.3 million and available liquid funds were USD 13 million. The company's net asset value was NOK 2.15 per share at the end of the quarter.

Nils Haugestad, interim CEO

2 Key events during the quarter

• • Fair value of multi-client library USD 35.9 million
  • Fair value of investment portfolio USD 7.6 million o Net gain of USD 0.8 million
  • Revenue from reprocessing Utsira represented USD 2.4 million and from multi-client late sales Utsira USD 0.5 million
  • Available liquid funds of USD 13.0 million*
  • Cash earnings USD 0.3 million for the quarter
  • Net asset value NOK 2.15 per share
• Bank deposits, trade receivable and marketable securities

3 Subsequent events after the quarter

• Announces new name - Aquila Holdings ASA o Multi-client seismic business
  o Investments in select listed and unlisted securities

4

4 Key financial indicators

USD thousands
Profit and loss	Q1 2023	Q1 2022

Revenue

Changes in fair value for investments Other gains and losses

Selling, general and administrative expenses Write-upmulti-client

Net profit (loss)

Basic earnings (loss) per weighted average shares (in USD)

2 905

1 368

814 (1 275)

• 666

1. (876)

• 5 618

1. 4 394
   (0.00)0.02

Financial position	31.03.2023	31.12.2022
Bank deposits	3 932	2 197
Available liquid funds *	12 973	7 248
Total assets	52 501	52 777
Total equity	46 153	47 652

Ratio analysis	31.03.2023	31.12.2022
Equity ratio	87.9 %	90.3%
Net asset value per share (NOK) **	2.15	2.00

*Bank deposits, trade receivable, marketable securities less payable for repurchase of own shares **Net asset value per share; total assets - total liabilities divided by number of shares

5 Business overview

5.1. Multi-client

The seismic multi-client data business model is frequently the preferred way to access seismic data for petroleum exploration and production (E&P) companies. The seismic data is licensed by E&P companies to assist in the discovery and development of petroleum resources. The Group's return on investment from its multi-client library

is seen through the life span of the data; from its early stage with revenues coming from the pre-funding by E&P companies during the execution of the program, through subsequent late sales after the seismic images are processed and available.

The Group's multi-client data is targeting near-field exploration, where production infrastructure is in place and where E&P companies need high-quality seismic data to unlock existing and new resources. In these production fields, oil and gas can be developed with lower cost, environmental impact and emissions.

In the fourth quarter of 2022, our multi-client business line, Axxis Multi Client, announced several milestones, such as the announcement of the Axxis/CGG

5