COVID-19 forces AGS to tighten its belt
Ocean bottom node seismic player Axxis Geo Solutions (AGS) said on Monday that it will reduce operations due to significant uncertainty in the market as a result of the COVID-19 crisis.
According to the Oslo-listed AGS, this should take place following its current surveys in the North Sea and Egypt.
The company will enact a “smart stack” model which should limit run-rate expenses until the market rebounds but will still allow for quick mobilization to new projects.
Namely, vessels, nodes, and other key equipment will stay in a state of readiness.
The company said it has agreement with key partners to allow for vessels and equipment to be ready and available for quick mobilization at minimal cash cost.
AGS will cut Its onshore staff by approximately 20 per cent whilst maintaining core positions, business development and tendering activities.
It plans to retain key crew personnel to allow for quick mobilization.
Consequently, AGS expects to reduce its cash run-rate to less than $800,000 per month in smart-stack mode.
Furthermore, AGS said it will initiate additional reductions if it does not secure more work prior to the Q3-end.
These reductions should reduce its cash run-rate to less than $400,000 per month.
To remind, the company also recently converted more than $34 million of outstanding trade obligations into loan agreements.