Norwegian seismic acquisition company Electromagnetic Geoservices ASA (EMGS) has announced a reduction in its cost base “in line with a reduced level of activity.” The company said this would lead to layoffs.
The company said on Wednesday it would seek a global reduction in employee expenses of approximately 20% by using both temporary and permanent layoffs amongst others. The cost reduction measure will yield effects gradually as headcount reductions onshore and offshore are scheduled to follow a different timeline, EMGS said without providing details.
“The market is expected to continue to be subdued until the oil price recovers and customers increase their E&P budgets. Cost reductions and cost control will, therefore, continue to be important focus areas in the company. However, we will maintain a footprint in our core markets to be able to efficiently market our services and be ready when the market turns,” says Christiaan Vermeijden , CEO of EMGS.
The company last week said its vessel utilization for the third quarter 2016 was 52% compared with 63% for the third quarter in 2015. In the third quarter of 2016, the company’s vessels were allocated 31% to multi-client projects and 21% to a funded research and development project. No vessel capacity was spent on contract work. In the comparable quarter of 2015, the vessels were allocated 16% to contract work and 48% to multi-client projects.