PGS Expects Seismic Market to Strengthen in 2008
Petroleum Geo-Services expects a further strengthening of the market for seismic services in 2008. PGS continues to experience improved pricing and expects marine contract revenues to increase by around 40% in 2008 compared to 2007. The Company will increase its spending on technology in 2008 in response to customers' demands. Despite higher technology spending and the continued impact from industry wide inflation, the Company expects its marine contract margins to further improve to around 55% in 2008.
For the marine segment, PGS guided that 2008 3D fleet mix is planned at approximately 25% multi-client and 75% contract seismic. Both multi-client late sales and multi-client investments are expected to be higher than in 2007. Multi-client prefunding is expected around 100% of cost, lower than in 2007, and influenced by increased reprocessing, 2D investments and lower targeted prefunding for the Crystal 2 survey in the Gulf of Mexico.
For the onshore segment PGS guided that revenues and operating profit are expected to be approximately in line with 2007. In addition, planned multi client and capex are also expected to be in line.
The increased technology investments are mainly related to further commercialization of PGS Electromagnetics, fiber optic permanent field monitoring and the next generation streamer technology, now branded to GeoStreamer (r). Increased training and education of staff is high on the agenda to meet the increasing need for highly skilled employees.
PGS President and CEO, Svein Rennemo stated the following:
"We expect 2008 to be another strong year for PGS, reflecting continued buoyancy in global seismic markets and growing impact from our increased spending on technology. Our acquisitions this year within electromagnetics, data processing and high-end fleet capacity through Arrow Seismic, will further enhance our efficiency and technology lead going forward."
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