TGS back to black in 4Q

Multi-client geoscience data provider TGS returned to profit during the fourth quarter of 2016 compared to a loss in the corresponding quarter of 2015. 

The multi-client data provider on Thursday reported a profit of $23.9 million for 4Q 2016, versus a $121.5 million loss in the prior-year quarter.

TGS’ revenues increased during the quarter totaling $164.7 million compared to $131.7 million in 4Q 2015.

At the end of the quarter, TGS’ backlog decreased by 65% to $51.2 million, compared to 4Q 2015, mainly due to high production on the Gigante projects offshore Mexico which was completed during the quarter. The company also completed the acquisition of the 600,000 km² Gigante multibeam survey.

Earlier on Thursday, the company announced the start of another multibeam survey named Otos and designed to mirror the Gigante multibeam and seep study.

 

‘Another challenging year’

 

Looking ahead, TGS said in its report that, with oil companies’ E&P spending expected to remain around 2016 levels, 2017 is likely to be another challenging year for the seismic industry, with low visibility and high volatility from quarter to quarter.

Meanwhile, the company added, the outlook for a recovery of exploration activity and seismic spending in the longer-term is gradually improving. As this prolonged period of reduced exploration spend continues, it is expected that the situation with respect to shrinking reserve life will become a critical issue for E&P companies.

Simultaneously, both the E&P sector and the service industry are continuing to cut costs, leading to substantial reduction of marginal costs of bringing new resources on stream.

TGS expects its new multi-client investments during 2017 to be at approximately the same level as in 2016. Pre-funding of new multi-client investments is expected to be approximately 40-45%.

Offshore Energy Today Staff