Norway's TGS Cuts Revenue Guidance, Shares Tumble


OSLO, Oct 8 (Reuters) - Seismic surveyor TGS lowered its full-year revenue guidance for the second time in three months in another sign that a decade-long boom in capital spending by oil firms may be over.

TGS's stock fell 8.5 percent in early trade, hitting its lowest level since July 2012. Shares in rival PGS fell 3.7 percent.

The firm, which maps the seabed for energy firms looking for oil and gas offshore, said net revenues for the year were seen at between $810 million and $870 million, below earlier forecasts for $920 million-$1 billion as oil firms delay projects.

"We continue to experience delays as we wait for permits to acquire new surveys," TGS Chief Executive Robert Hobbs said in a statement. "We remain very focused on quality. This focus has resulted in TGS passing up or postponing a number of low prefunded projects where the risk of achieving the required return is too high."

In early July, the firm saw full-year revenues between $970 million and $1.05 billion.

Its pre-funding ratio for 2013 - a key indicator that measures the amount of money oil firms put upfront to finance seismic surveys - was near the lower end of the previously guided range of 40-50 percent.

For the third quarter, that indicator was at 39 percent.

Recently oil and gas firms have been cutting back on investments to try and improve profits and save cash for dividends, due to rising costs impacting profit margins.

Suppliers and analysts expect investment growth by oil firms to slow sharply this year and in 2014, in line with a projected fall in oil prices. The spending boom has squeezed budgets and forced companies to sell assets and issue debt to pay dividends.

(Reporting by Gwladys Fouche and Terje Solsvik; Editing by David Cowell)

Copyright 2017 Thomson Reuters. Click for Restrictions.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Petroleum Inspection Manager
Expertise: Field Service Tech|Marine Surveying|Surveying
Location: New Orleans, LA
Operator 1 - TCP
Expertise: Perforation
Location: Oklahoma City, OK
Fluids Plant Operator
Expertise: Maintenance Technician|Mud Engineer / Drilling Fluids|Refinery / Plant Operator
Location: Monahans, TX
search for more jobs

Brent Crude Oil : $56.86/BBL 0.76%
Light Crude Oil : $50.66/BBL 0.21%
Natural Gas : $2.959/MMBtu 0.30%
Updated in last 24 hours