Skip to main content

Odyssey releases 2017 results and provides updates on current projects

Published by , Editor
World Fertilizer,

Odyssey Marine Exploration, Inc. has released a statement announcing its results for the full year ended 31 December 2017, and provided an update on current projects.

Don Diego project

On 21 March this year, the 11-judge panel of the Superior Court of the Federal Court of Administrative Justice in Mexico ruled unanimously in favour of the company’s subsidiary, Exploraciones Oceánicas, S. de R.L. de C.V. (ExO), nullifying the denial of ExO’s environmental permit application for the extraction of phosphate sand from its Don Diego project.

Odyssey holds a 53.88% interest in ExO. In order to proceed to the next phase of development of the deposit, Odyssey and its subsidiaries require the approval of the environmental permit application, which is now anticipated in due course as a result of this decision. Nevertheless, until the publication of the judicial decision, any additional details regarding the status or timing of the permit would be speculative. In the statement, Odyssey claims that it will provide further information on this matter once details appropriate for public disclosure become available.

Odyssey claims that the Don Diego project is expected to provide both economic and social benefits to Mexico via job creation, reduced fertilizer pricing, increased crop yields, generation of tax revenues, and the funding of programs that will promote the protection and enhancement of the marine environment. Phosphate, which will be the product of the dredging project, is a crucial component of fertilizers. The deposit location reportedly makes it an attractive potential sourcing site for the Mexican fertilizer and agricultural industry. It is centered more than 22 km offshore in the Pacific Ocean at an average depth of 80 m, making it within reach of standard dredging equipment.

Contracted projects

According to the statement, currently planned or operational shipwreck and mineral projects are usually conducted under leveraged contract models whereby Odyssey is paid to carry out offshore services while retaining a significant back-end share of the future net proceeds from these projects. It is expected that the combined potential cash flows from these projects will fund operations for a number of years while simultaneously increasing the value of projects in which the company has an equity ownership position.

Odyssey claims that operations are currently underway on a contracted project that is expected to start generating cash this year to fund company operations and is forecast to produce cash returns for a minimum of 12 – 18 months.

Planning is continuing for recovery of phosphate sands from the Don Diego project so that preliminary operations can begin quickly after environmental approval is granted. Odyssey claims that it is under contract to provide a number of services related to the project once all approvals have been granted. This contract has the potential to produce several million dollars in positive cash flows and enhance the value of Odyssey’s investment in this project. A number of other new subsea mineral projects that will need offshore exploration work and resource evaluation by Odyssey are currently being developed. In the statement, the company claims that it is anticipating receiving further contracts this year to provide services for these new projects, which are expected to produce cash flows and potentially equity stakes in these projects for Odyssey.

Management commentary

CEO, Mark Gordon, said: “Odyssey is making great progress already in 2018 on both the mineral and contracted shipwreck elements of our business, and we received notification from NASDAQ on 8 March that we had regained compliance with all listing requirements. The recent ruling by the Mexican Superior Court is a big step towards the ultimate issuance of the environmental permit, which will allow us to confirm that the ‘Don Diego’ deposit can produce cost-effective phosphate for much-needed fertilizer in an environmentally responsible manner.

“Offshore operations cannot commence until the environmental permit is issued. The project will use standard dredging ships and equipment that have been operating for decades in Mexican waters with a proven track record of minimal environmental impacts. Additionally, the monitoring and mitigation programs, confirmed through extensive testing and modelling by independent experts, assure minimal impact to and rapid recovery rates of the environment throughout the process.

“In addition to planning activities for the ‘Don Diego’ project, our marine operations team continues to deliver results in the deep ocean. In our November update we noted that a major project would commence after delivery and testing of specialised equipment. That testing has been completed, and our team is currently actively engaged in offshore operations on a contracted project in which we have a significant back-end interest.

“As we continue Odyssey’s transformation, shifting to a partnership model and focusing on minerals, we are becoming more efficient and focused while driving cash flows to fund operations. Those efforts are continuing to pay off with a 37% reduction in total operational expenses in 2017 compared to 2016, as well as a 60% reduction in operating expenses compared to 2015. Between our current projects, projects in development and efficiency improvements, we’re looking forward to delivering exceptional results for our shareholders in 2018.”

2017 financial results

In the statement, Odyssey also claims that its total revenues decreased by US$3.4 million in 2017 as compared to 2016. Revenue in 2017 came exclusively from shipwreck explorations for Magellan, whereas 2016 includes an executed marine survey services contract, as well as shipwreck exploration services for Magellan.

Marketing, general and administrative expenses fell from US$7.9 million in 2016 to just US$6.2 million in 2017. The decrease was largely because of: a decrease of US$1.9 million related personnel expenses resulting from regular, incentive and share-based compensation; an increase of US$0.4 million in admiralty legal support; and a US$0.2 million reduction in general corporate overhead supportive expenses.

For 2017, Odyssey claims that operations and research expenses were US$3.4 million compared to US$8.3 million for the same period in the previous year. The variance was largely because of: a US$4.3 million reduction of marine services costs, which include technical crew costs as well as other marine operational costs such as equipment rental, fuel, port fees and consumables; and a US$0.5 million decrease in general operations support services overhead, which includes insurance expenses, depreciation, travel and professional services. 2016 included the full-time operations of the Odyssey Explorer vessel, which was sold in mid-2016. The 2016 US$1.0 gain on the sale of marine assets was because of the sale of the vessel and one other marine asset.

The net loss for 2017 was US$7.8 million compared to a net loss of $6.3 million in 2016.

Read the article online at:

You might also like

Incitec Pivot Limited shares 1H24 results

The company delivered underlying EBIT growth of 18% compared to the pcp after adjusting for re-basing items which relate primarily to the closure of manufacturing at Gibson Island and the sale of Waggaman.


Embed article link: (copy the HTML code below):


This article has been tagged under the following:

Fertilizer project news