Geokinetics Reports Record Backlog, Impact from Hurricanes
Geokinetics Inc. announced that the Company's estimated backlog has increased to approximately $516 million as of August 31, 2008, a new record for the Company. Approximately $378 million or 73% of current backlog is related to international business (excluding Canada), with the remaining $138 million or 27% of current backlog related to North America ($130 million of this amount is attributed to the United States). Backlog at the end of the second quarter was $413 million.
Richard Miles, President and CEO commented, "We are excited that our customers continue to select Geokinetics as their provider of choice for their complex land and shallow water seismic data acquisition needs. Our current backlog reflects increasing demand for our services, especially in the offshore bottom cable market and in challenging land environments internationally.
"This increased backlog demonstrates that our recent significant investments in state of the art technology and increased recording capacity are producing the expected positive results. This substantial increase in our backlog reinforces our business strategy and improves our revenue growth visibility."
In addition, the Company has suffered some negative effects from Hurricanes Gustav and Ike. In the United States, four of the Company's eight crews affected by the Hurricanes have been down for a total of forty-five days during the third quarter representing 6% of crew days in the quarter to date. The Company's contracts generally include weather and other standby clauses which will, at a minimum, cover the Company's costs during periods of downtime, but do not always allow for margin protection. As of this press release, one of these crews currently working near the Texas Gulf Coast is still down. The Company is actively engaged with the local municipal government to secure approval for this crew to return to work.
Miles continued, "All of our employees are safe, our offices suffered only minimal damage and we have experienced minor equipment damage from the Hurricanes. Our crews operating in the United States have suffered downtime and delays, which will impact our third quarter results for the North American data acquisition segment; however, we expect that strong performance internationally will help to reduce the impact. The adverse weather caused many office closures in Houston, resulting in delays of some shipments going overseas, which will affect one crew in our international data acquisition segment; however, we do not expect the impact to be far reaching, and will likely only affect the start up of a large project scheduled for early in the fourth quarter with little to no impact on the third quarter. While we have felt the effect of these Hurricanes and there will be some short-term impact, we remain extremely optimistic about the future and our growth prospects."
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