Norway's TGS-Nopec Defies Seismic Industry Gloom With Profit Rise
OSLO, April 24 (Reuters) – Strong sales to oil firms helped seismic surveyor TGS-Nopec report better-than-expected first quarter profits, indicating energy companies are still committing to exploration after months of cost cuts.
TGS-Nopec's results pushed its share price up by more than 7 percent and lifted shares across its sector.
Seismic surveyors, which map the seabed for oil and gas deposits, have been hit hard by lower exploration spending by energy companies which are seeking to protect margins and dividends after a decade-long spending boom.
Norwegian rival Petroleum Geo-Services warned in February its first-quarter results would be weaker due to lower demand from oil companies.
But it would appear the slowdown in exploration spending was not as brutal as expected, said analyst Christian Yggeseth at Arctic Securities, an Oslo-based brokerage.
"There is little in today's numbers from TGS indicating there is a full stop in the oil companies' desire to explore. We think this is positive for the sector as whole," said Yggeseth.
Smaller peer Dolphin Group told Reuters earlier this month it saw good momentum in the seismic market and that the visibility for the industry in general was improving.
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