PGS curtails quarterly loss. Keeps its revenues in balance

Norwegian marine seismic acquisition specialist Petroleum Geo-Services (PGS) saw a minimal one percent decrease in revenues during the 3Q of 2016 compared to the prior-year quarter, mainly due to good MultiClient performance, and reduction in its net loss. 

In 3Q 2016, PGS’ revenues decreased by less than 1%, amounting to $224.1 million, compared to $225.7 million in 3Q 2015.

MultiClient late sales of $63.2 million in the quarter have almost doubled in comparison to $36.6 million in 3Q 2015. Pre-funding MultiClient revenues of $84.3 million with a corresponding pre-funding level of 134% have also increased when compared to $83.8 million and 88% respectively in 3Q 2015.

Furthermore, PGS has decreased its loss for the quarter by more than three-fold. The $110 million loss from 3Q 2015 has now shrunk to a $29 million loss for this year’s third quarter.

The order book has decreased to $190 million at September 30, 2016, including $113 million relating to MultiClient orders. Last year’s corresponding quarter had a $245 million order book.

PGS said it had a good order intake after the quarter end with 70% of active vessels booked for the fourth quarter of 2016.

The company recorded a $9.2 million impairment in the quarter which relates to the MultiClient library. In comparison, impairments in 3Q 2015 summed up to $65.3 million.

Jon Erik Reinhardsen, President and Chief Executive Officer of PGS, said: “A higher and more stable oil price compared to early 2016, in combination with cash flow improvements among oil companies, should benefit seismic market fundamentals.

“Vessel utilization will be challenging over the coming winter with some idle time in Q4, as some clients are moving work from Q4 into 2017. Due to the weak market, we have decided to warm stack the Ramform Vanguard over the winter.”

PGS said that, regardless of the market showing early signs of improvement, it still expects a challenging market going forward.

The company said that MultiClient cash investments will be around $200 million, with a pre-funding level of above 100%. Also, 40% of 3D vessel time is allocated to MultiClient acquisition.

Capex is expected to be in the region of $215 million, of which $165 million is for newbuilds.

Offshore Energy Today Staff

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