PGS Takes Hit as Vessel Production Slumps

PGS has experienced weaker than planned vessel production in its Marine segment in May and early June. For that reason, PGS has adjusted its guidance somewhat for the full year 2008. The year on year growth in marine contract revenues is expected to be approximately 75% with a corresponding EBIT margin expected to be approximately 50%.

The reduced productivity relates primarily to weather downtime on a project offshore India caused by early start of the monsoon season. Further, two streamer incidents have contributed to the deviation in productivity.

In addition Q2 vessel utilization is impacted by vessel steaming activity with a record number of vessels moving to the North Sea and two vessels moving from India to East Asia.

For Onshore, second quarter is expected to be the seasonally weakest quarter in 2008, which is in accordance with earlier communication that market activity in second half 2008 is expected to be higher.

Despite the deviations in marine productivity, which will be fully accounted for in the quarter, PGS expects to report its strongest Q2 ever and its third strongest quarterly EBIT ever as a pure geophysical company.

The vessel allocation information for Q2 2008 will be released as planned at around the end of the quarter.