Norwegian Seismic Survey Firms See Mixed Picture

Thursday saw mixed news from Norwegian survey firms as Petroleum Geo-Services reported disappointing second-quarter results, while TGS announced two new sampling contracts.

PGS reported a decline in its 2Q 2014 revenues of 11.7 percent to $337 million. Meanwhile, profit at the EBITDA level fell to $170.6 million (2Q 2013: $209.6 million).

PGS CEO Jon Erik Reinhardsen blamed the poorer results on lower multi-client revenues. In particular the company suffered from a lack of pre-funding from the Triton multi-client survey in the Gulf of Mexico. Mobilization delays on certain marine contract surveys had a negative impact on contract margins, although Reinhardsen added that projects have performed well after start-up.

"We strongly believe in the technical and commercial success of the Triton survey in the Gulf of Mexico, which has historically been one of the most attractive areas for multi-client investments. A fast track imaging product from key areas of the Triton survey is now available and we expect to secure pre-funding for the survey in the second quarter," Reinhardsen said.

"Less predictable customer spending and current low bidding activity indicate risk of a weaker market towards the end of the year. Accordingly, we have lowered our full year EBITDA guidance to approximately $850 million."

TGS, which will announce its 2Q financial results on July 31, reported that it had won contracts for two multi-client geochemical seafloor sampling and seep studies offshore Canada and in the Barents Sea.

The Labrador Sea Sampling 2014 contract will be collected in partnership with VBPR and PGS. TGS said that this will be a comprehensive multi-client geochemical seafloor sampling and hydrocarbon seep study offshore Canada in the province of Newfoundland and Labrador. The project will provide data along the 745-mile long Newfoundland-Labrador coastline showing numerous seep anomalies on the seafloor. In addition to the seep samples, TGS will acquire heat flow measurements to constrain basin models.


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