Red ink for Polarcus in 3Q

Polarcus, an offshore geophysical company, went from black to red during the third quarter 2016 compared to a year earlier performance. 

The geophysical company’s net loss for the quarter was $17.4 million, versus a $19.8 million profit in the corresponding quarter in 2015.

Further, Polarcus’ revenues dropped by more than half from $132.2 million in 3Q 2015 to $64.6 million in this year’s corresponding quarter.

The company’s capex also declined during the quarter from $1 million in the 3Q 2015 to to $0.1 million.

When it comes to vessel activity, the geophysical’s company’s vessel utilization for the quarter decreased to 90%, which is only 3% less than in the same period last year. Contract utilization saw a rise from 66% in 3Q 2015 to 86% in 3Q 2016, while Multi-Client utilization decreased to 4% in 3Q 2016 from 27% in the same period last year.

The estimated value of backlog measured at the end of the quarter is $105 million.

Post quarter end, the company entered into a MoU to collaborate with TGS to jointly develop Multi-Client projects. The collaboration is expected to drive vessel utilization as well as expand its Multi-Client business with limited investments.

Low oil prices still an issue

Polarcus noted that the marine seismic market continues to be challenging with continued subdued exploration spending by oil companies and lower tender activity across all geographic regions. The company said that it has attempted to mitigate the negative impact of low oil prices and cautious spending by oil companies through cost management initiatives and workforce reduction, among others.

Polarcus also developed a new seismic acquisition technique, XArray and the Fast Track processing product which are expected to generate increased revenues.

But regardless of those measures, the company estimates it can operate with these market prices until 4Q 2017, after which time it will become reliant on an improvement in market conditions.

Offshore Energy Today Staff