Polarcus expects challenging market to continueCompany News // October 30, 2017
Seismic survey specialist Polarcus says the market continues to be weak and says the winter period will be challenging.
Releasing its Q3 2017 financial statements, Polarcus said it recorded vessel utilisation of 92 per cent, up from 75 per cent in Q2 2017, driven by robust activity over the summer. Revenues increased 62 per cent from Q2 to US$58.5 million.
However, the company said the weak seismic market has continued for the third straight year. “In this period, the industry has seen the number of active vessels in the global 3D fleet more than halve,” said the company. “Early in Q4 2017, it is estimated that of these remaining active vessels, half are idle. The summer saw a short-lived balance of supply and demand but with oil company exploration spend still cautious, the winter period is expected to be challenging.”
Throughout the downturn, Polarcus has managed its cost base in a disciplined fashion and again delivered sequentially lower operating costs in Q3 2017, achieving a 3 per cent reduction in gross cost of sales in combination with significantly increased fleet utilisation.
Polarcus now says it expects these challenging market conditions to continue into 2018 and has, after the quarter-end, undertaken to further streamline and reshape the organisation to deliver improved flexibility and optimised productivity.
“The key focus is to strengthen the overall organisation through maintaining regional sales offices comprising experienced and well-networked sales and marketing teams, and consolidating fleet operations and support services at the company's headquarters,” the company said.
“This strategic reshape of the organisation enables Polarcus to reduce costs effectively when global fleet activity is decreased. As a consequence, the company will benefit from an estimated US$8M in annualised cost savings and a right-sized organisation for the current market outlook.”
Polarcus also announced that it had received a letter of intent from an undisclosed client to prefund a multiclient XArray 3D seismic acquisition project in the Middle East. The project will commence in Q4 and run for approximately two months.