Marine seismic player Polarcus saw lower revenues, vessel impairments, and other charges during the fourth quarter 2016 but posted a smaller net loss when compared to the year-before period.
Polarcus’ net loss for the fourth quarter 2016 was $97 million, compared to $289.2 million net loss in the same period of 2015.
The prolonged weak market conditions led the company to recognize a $24.8 million non-cash impairment charge on the carrying values of the vessels and seismic equipment, as well as a non-cash onerous contract provision of $26.4 million in the quarter.
A total of $9.5 million of the impairment charge relates to equipment owned by Polarcus Nadia and $22.4 million of the onerous contract provision relates to the operating lease for the same vessel.
The company’s fourth quarter 2016 revenues of $47.2 million were down from 4Q 2015 and revenues of $72.4 million.
The seismic player explained that the fourth quarter financial results reflect a challenging seismic market resulting in fleet utilization significantly weaker than the utilization reported by the company in recent quarters.
Namely, Polarcus’ total utilization for the fourth quarter of 2016 was 72%, down from 90% in 3Q 2016 and down from 80% in 4Q 2015. Contract utilization decreased to 55% from 69% in 4Q 2015 while Multi-Client utilization increased to 17% from 11% in 4Q 2015.
The estimated value of backlog measured at the end of the quarter was $230 million.
Looking ahead, Polarcus said the marine seismic market continues to be challenging, with continued limited exploration spending by oil companies. The lower demand, combined with excess vessel capacity in the market, drives high competition for proprietary contracts.
Offshore Energy Today Staff