Oslo-listed seismic player, Petroleum Geo-Services (PGS), has posted net loss of $110 million for the third quarter of 2015, compared with $8.4 million profit in the corresponding period in 2014.
In the third quarter of 2015, the company recorded revenues of $225.7 million (out of which $120.4 million goes to MultiClient revenues and $77.3 million on contract revenues), down 43 percent, versus $394.3 million a year earlier.
PGS has booked impairments of $65.3 million related to seismic vessels, triggered by weak near term market and the company’s capacity management which involves stacking of five 3D vessels. In addition, $10.7 million of foreign currency loss was booked, mostly relating to reduced USD value of legal deposits in Brazil denominated in local currency.
To improve its financial position and further slash capex, the company has negotiated an amendment to the financial covenants for its Revolving Credit Facility, decided to cold-stack Ramform Viking at the end of this month and also agreed to postpone the delivery of Ramform Hyperion to Q1 2017.
In addition, PGS has entered into charter agreements for Sanco Swift and Sanco Sword, leading to cold-stacking of Ramform Vanguard and Ramform Valiant. Before or at the time of taking delivery of Sanco Swift and Sanco Sword , PGS plans to use the equipment on the cold-stacked vessels to equip the two chartered vessels.
The low oil price, reduced oil company spending and intense competition for work among seismic companies impact pricing and utilization negatively. PGS expects market uncertainty and low earnings visibility to continue well into 2016.
Furthermore, PGS said it expects full year 2015 EBITDA to be approximately $500 million. Capital expenditures are estimated to be approximately $175 million, of which approximately $130 million is for the new builds Ramform Tethys and Ramform Hyperion.
As at September 30, 2015 (including $103 million of committed pre-funding on MultiClient projects), the order book totaled $245 million, compared to $259 million at June 30, 2015 and $466 million at September 30, 2014.