MCG expects low seismic demand to persist as cost cuts linger
Marine seismic data provider MultiClient Geophysical (MCG) expects the low demand for seismic data to continue throughout 2016 despite the increase in oil price since mid-February 2016.
In its quarterly report on Friday, MCG said that the oil companies would continue its cost discipline in 2016 reflecting the low oil price and uncertainty in the prediction of future oil price.
As a result of the current situation, the marine seismic company stated it would carefully invest in new projects and seek a minimum of 50% prefunding to proceed with new projects. In addition, MCG is actively working to reduce the operational cost of the company.
So far, MCG said, this has resulted in an approximately 20% reduction compared to the corresponding quarter last year and MCG noted it would continue to focus on cost control also in 2016.
The company added it expects to invest in the order of $7-10 million gross in new seismic projects in 2016. The majority of this investment is in Mexico.
MCG noted it sees Mexico as one of the few areas that will experience attention from oil companies willing to invest in deep water exploration. Further, MCG has all necessary permits in place to expand the Maximus survey offshore Mexico, and is ready to move once the market improves, the company added.
In the report, MultiClient Geophysical posted a net loss for the first quarter of 2016 of $2.6 million, compared to a net loss of $1.6 million in the first quarter 2015.
Reported revenues in the first quarter 2016 were $0.9 million, compared to $1.9 million in the first quarter 2015. All revenue came from the Americas, and 100% of the revenue was generated from pre-funding.
Offshore Energy Today Staff