PGS "well placed to navigate current market" but postpones newbuild deiveriesCompany News // February 13, 2015
Seismic survey specialist PGS says it is well placed to navigate the current market, and says that despite the challenging market "there has been good appetite for quality data in the right locations."
The company said marine contract EBIT margin was negatively impacted by weaker pricing and utilization in in the last quarter, and for the full year it ended at 15 per cent.
"The low oil price and cautious spending behaviour among oil companies continue to impact bidding, pricing and vessel utilization. Visibility is low and we are continuing our proactive approach to prepare for the challenging year ahead," said the company.
"Having already stacked low-end capacity vessels and with further measures being implemented, we expect a cost reduction of US$190 million in 2015, excluding growth of our asset light activities and schedule driven changes.
"First quarter 2015 will be weak, especially for marine contracts. Over the last years we have positioned the company to perform over the cycle with a solid balance sheet, multiClient discipline and the most productive fleet in the industry. We are well placed to navigate in the current market environment.
"Our full year 2015 guidance is reiterated, but the current market remains very uncertain."
PGS noted that it has two Ramform Titan-class newbuilds under construction at Mitsubishi Heavy Industries (MHI) Ltd in Japan with original scheduled deliveries in 2015. PGS and MHI have agreed a revised construction schedule for Ramform Tethys and Ramform Hyperion and delivery is now scheduled for the first quarter and third quarter of 2016.
The revised delivery times comes with no additional cost to PGS. The company has also taken steps to adjust timing of equipment and similar deliveries. The cost of each of the two vessels is approximately US$285 million including commissioning and a comprehensive seismic equipment package, but excluding capitalized interest and post-delivery cost.