EMGS unveils raft of cost reductionsCompany News // October 5, 2015
Electromagnetic Geoservices ASA (EMGS) says it has implemented further cost reduction measures reflecting the challenging market conditions in the oil service industry.
The company said it has identified and implemented comprehensive cost reductions relating to sub-contractors and reduced staff levels.
"The key elements of the programme is a reduction of vessel capacity by one vessel, from three to two vessels, and a corresponding reduction in employee expenses," said EMGS.
EMGS initiated cost reduction measures at the beginning of the first quarter of 2015, and further measures were announced in June. Based on the development in revenues so far in 2015, as well as the outlook for the rest of 2015 and 2016, the company has decided to implement further cost reductions.
The company expects that the additional cost reductions will reduce its annual operational costs by approximately US$35 million. Overall, the cost reductions implemented in 2015 are expected to amount to US$70 million, reducing the company's annual operational cost level to below US$100 million.
"Although market conditions currently are challenging, EMGS believes that the company’s technology and flexible business model leaves it well positioned for an upturn in the market," it said.