PGS returns to profit amid improving market

Norwegian seismic services provider Petroleum Geo-Services (PGS) returned to profit in the third quarter of the year from a loss in the corresponding quarter of 2018 as its revenues received a boost amid improving market environment.

Norwegian seismic services provider Petroleum Geo-Services (PGS) returned to profit in the third quarter of the year from a loss in the corresponding quarter of 2018 as its revenues received a boost amid improving market environment.

In its report for the third quarter of 2019, PGS on Thursday reported total revenues of $276.5 million, compared to $163.4 million in Q3 2018.

PGS reported segment revenues of $234.2 million for Q3 2019, compared to $192.1 million in Q3 2018.

The company’s net profit in this year’s third quarter was $31.5 million, compared to a loss of $35.4 million in the same period last year.

PGS reported contract revenues of $76.3 million for Q3 2019, a 122% increase compared to $34.3 million in Q3 2018. The increase came as a result of significantly higher prices and more capacity allocated to contract work.

The company’s order book more than doubled in Q3 2019, compared to Q3 2018, totaling $336 million. The order book was $300 million at June 30, 2019, and $144 million at September 30, 2018.

Rune Olav Pedersen, PGS President and Chief Executive Officer, said: “Our contract revenues more than doubled from Q3 2018 and continue to benefit from an improving market environment. For completed and secured 2019 work, our prices are on average close to 40% higher than the 2018 average.

“We used a majority of our Q3 capacity on attractive and well pre-funded MultiClient projects in the North Atlantic region, as well as certain parts of Asia Pacific. Total MultiClient sales in Q3 were in line with our expectations. High sales from surveys in the processing phase contributed to a high pre-funding level in Q3, and brings our pre-funding expectation for the full year to be in the high-end of our targeted range of 80-120%.

“Q3 was another quarter with strong utilization, and we experience significantly higher demand, compared to last year. Our order book is up sequentially, and we are confident in achieving good utilization for all eight active vessels during the coming winter season.”

PGS expects the significant cash flow generation among clients and an increase in exploration and production spending, including offshore spending, to contribute to a continuing recovery of the marine seismic market fundamentals. Contract seismic is the activity currently benefiting the most from the improvement, driven by more 4D acquisition and generally higher demand for new proprietary seismic data.

Approximately 50% of 2019 active 3D vessel time is currently expected to be allocated to MultiClient acquisition.

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