Lower MultiClient Revenues Impact PGS’ Q2 Results

Petroleum-Geo Services (PGS) released the results for the second quarter with revenues of $337.0 million, compared to $381.7 million in Q2 2013.

Second quarter highlight include:

– EBITDA of $170.6 million, compared to $209.6 million in Q2 2013,
– EBIT, excluding impairments, of $55.3 million, compared to $110.6 million in Q2 2013,
– Group EBIT margin, excluding impairments, of 16%, compared to 29% in Q2 2013,
– Cash flow from operations of $40.2 million, compared to $271.3 million in Q2 2013,
– EPS of $0.14, compared to $0.33 in Q2 2013,
– Record MultiClient revenues from Europe,
– Approved and paid dividend of NOK 2.30 per share,
– PGS Towed EM streamer voted best new geoscience technology by  a jury of industry experts nominated by Harts E&P magazine,
– Launched Complete Wavefield Imaging, an imaging technology detecting shallow hazards from GeoStreamer data.

“Our second quarter was impacted by lower MultiClient revenues than expected, due to lack of pre-funding from the Triton MultiClient survey in the Gulf of Mexico. MultiClient revenues from other projects of the library remained healthy. Mobilization delays on certain Marine Contract surveys impacted the contract margin negatively. The projects have performed well after start-up.

“We strongly believe in the technical and commercial success of the Triton survey in the Gulf of Mexico, which has historically been one of the most attractive areas for MultiClient investments. A fast track imaging product from key areas of the Triton survey is now available and we expect to secure pre-funding for the survey in H2.

“Less predictable customer spending and current low bidding activity indicate risk of a weaker market towards the end of the year. Accordingly, we have lowered our full year EBITDA guidance to approximately $850 million.

“Our strategy remains firm with focus on productivity leadership, technology differentiation and shareholder return,” commented Jon Erik Reinhardsen, President and Chief Executive Officer.

Press Release, July 24, 2014