Oil services market fundamentals to remain weak in 2019, EMGS says

Norwegian geophysical services company EMGS has said that the market outlook for oil services is challenging and characterized by high uncertainty. The company expects market fundamentals to remain weak in 2019.

However, EMGS said on Wednesday in its 4Q 2018 report that it had noted an increase in commercial activity. In particular, the company is experiencing increased interest and commercial and technical discussions to more and potentially substantial proprietary acquisitions outside of Norway.

EMGS said it is looking to secure backlog in all regions. The timing of securing any additional backlog as a result of this increased commercial activity, however, remains highly uncertain.

Based on the current operational forecast, EMGS expects to operate two vessels globally in 2019.

For the fourth quarter 2018 EMGS reported a loss of $7.1 million compared to a loss of $6.6 million in the same period last year.

Losses for the full year 2018 were $36.6 million, compared to a loss of $23.2 million in 2017.

EMGS recorded revenues of $13.4 million in the fourth quarter of 2018, up from $10.8 million reported for the corresponding quarter of 2017. Contract and other sales totaled $7 million, while multi-client sales amounted to $6.4 million. For the fourth quarter of 2017, contract sales and other sales totaled $1.6 million, while multi-client sales amounted to $9.2 million.

Revenues for the full year 2018 amounted to $31.6 million, compared with $33.9 million for the full year of 2017.

The vessel utilization increased for the fourth quarter 2018 to 32% compared with 13% in the corresponding quarter in 2017. For the full year 2018, the vessel utilization was 33% compared with 56% in 2017.

As of December 31, 2018, EMGS’ backlog was $3.3 million compared with a backlog of $3.2 million at the end of the fourth quarter 2017.