Norway's oil and gas survey technology firm Electromagnetic Geoservices ASA (EMGS) has confirmed that it will be laying off staff as a result of the lower oil price environment.
“We estimate that around 25 staff will leave as part of the cuts,” EMGS Head of Investor Relations, Charlotte Knudsen, told Rigzone.
“The reason is the lower activity level that the company is experiencing, due to the low oil price and the reduced spending/budgets from exploration and production companies,” she added.
When asked if the company was considering further cuts in the future, Knudsen suggested to Rigzone that it was a possibility.
“We have no guarantees. We continuously have a strong focus on our costs and try to align the cost level to the expected activity level. It is currently hard to predict the future activity level.”
Based on a preliminary review of sales and investments, TGS revealed that in the fourth quarter of 2015 its net operating revenues reduced by 56 percent compared to last year, to approximately $131 million, and its expected 2015 full year revenues decreased by 33 percent to around $612 million. Reflecting the downward revenue trend recorded by TGS, EMGS said it expected to register a total of approximately $11 million in multi-client revenues for the fourth quarter of 2015, which is less than half of the figure anticipated this time last year.
With TGS anticipating weak market conditions to continue in 2016, both it and EMGS have implemented cost-cutting measures in an effort to combat the effect of the ever-declining low oil price.
“The activity level will be reduced as oil companies have become less willing to prefund new surveys”, TGS CEO Robert Hobbs, said in a company statement.
EMGS’ vessel utilization for the fourth quarter of 2015 came in at 21 percent, compared with 63 percent for the fourth quarter of 2014. For the full year 2015 vessel utilization was 59 percent, compared to 69 percent last year.
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