Fugro Sees Further Market Decline In First Half Of 2017
Feb 24 (Reuters) - Dutch deep-sea energy prospector Fugro said it expects a further significant decline in the offshore oil and gas services market in the first half of 2017 before oil companies prepare for new investments later in the year.
Fugro is still suffering the impact of a rout in oil prices that have fallen by more than 50 percent from mid-2014 highs, affecting its business as makes it uneconomic to prospect for the hard-to-reach subsea deposits in which it specialises.
"Both the stabilisation of our backlog over the last few months and clear signs that pressure on the oil supply side is beginning to build, indicate that our market may bottom out towards year end," Chief Executive Paul van Riel said in a statement.
The company expects its revenue to fall further in the first half of 2017. It also expects margin pressure to continue in the first half, but sees positive cash flow for the full year. It responded to a tough market by cutting 1,430 jobs during 2016 and reduced capital expenditure by 42 percent to 92.5 million euros. Core profit, while well down on the previous year, came in ahead of forecasts.
"Until the oil and gas market recovers, the company will continue to adjust its resources and cost base in line with activity levels," it said.
Fugro shares rose 3 percent to 14.99 euros by 0810 GMT.
The company reported a 46 percent drop in full-year core profit (EBITDA) to 189.5 million euros ($200.8 million), hurt by pricing pressure and low activity levels in energy market.
Analysts polled for Reuters had on average expected it to report core profit of 182 million euros.
"EBITDA was better than expected. I think mainly on the financial management the company has again made good progress. Net debt was lower than expected, working capital improved again quite significantly," KBC analyst Dirk Verbiesen said.
(Reporting by Alan Charlish; Editing by Subhranshu Sahu and Keith Weir)
WHAT DO YOU THINK?
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.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Gunvor CEO Sees Russian Refining Capacity Taking Hit from Drone Strikes
- Sinopec Engineering Posts Higher Annual Petrochemicals Revenue
- Subsea7 Secures Contract to Service Woodside's Trion
- These Factors Helped Brent Oil Price Break Above $85
- Imperial Pipeline in Winnipeg Goes Offline for Three Months
- Adnoc Inks Supply Deal for Ruwais LNG Project with Germany's SEFE
- Gaz System to Acquire Gas Storage Poland
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension