PGS sinks deeper in first quarter

Norwegian marine geophysical company Petroleum Geo-Services (PGS) saw its net loss deepen in the first quarter of 2016 while its revenues dropped compared to the same period last year. 

The geophysical company posted a net loss of $57.1 million in the first quarter 2016, compared to $19.5 million in the corresponding period last year.

PGS’ revenues for the quarter were $203.1 million, a 19% drop compared to $251.1 million in 1Q 2015.

The company explained that the reduction was mainly driven by a 31% decline in MultiClient pre-funding revenues and 14% lower marine contract revenues, although the absolute pre-funding level remained at 124%.

Jon Erik Reinhardsen, President and Chief Executive Officer, said: “We cold- stacked four 3D vessels last year and with a smaller and more productive fleet we are now delivering significantly improved utilization.”

Reinhardsen also added: “We are on track to deliver further cost savings in 2016 of $80 million.”

As the low oil price and reduction in oil companies’ spending continue to impact seismic demand, PGS stated it expects market uncertainty and low earnings visibility to continue through 2016.

The company’s MultiClient cash investments are expected to be approximately $230 million, with a pre-funding level of approximately 100%.

Further, capital expenditures are expected to be approximately $225 million, of which approximately $165 million is for the new builds Ramform Tethys and Ramform Hyperion. The company has initated a process to increase headroom under the maintenance covenant for its revolving credit facility.

The order book totalled $204 million at March 31, 2016 (including $104 million relating to MultiClient), compared to $240 million at December 31, 2015 and $394 million at March 31, 2015.

Offshore Energy Today Staff