Norwegian oil services firm PGS announced Friday that it will increase its capital expenditure to around $240 million in 2016, from a full year 2015 CAPEX of approximately $175 million.
PGS has implemented substantial cost reduction procedures in 2015, in an effort to protect cash flow in a lower oil price environment. The company has carried out cost reductions of approximately $290 million this year, with its 2015 CAPEX down $75 million compared to PGS’ original plan. Despite announcing its intention to increase CAPEX in 2016, the company has indicated that cost discipline will have a high priority next year and that there is potential for further cost reduction.
In the second quarter of 2015, PGS posted a revenue loss of over $80 Million compared to the same period last year. The company’s revenues in 2Q 2015 were $255.8 million, which was $81.2 million down on the 2Q 2014 revenue figure of $337 million.
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