Seismic player Polarcus said on Wednesday it expects lower level of multi-client prefunding for the full year 2016, caused by slower production rate in Brazil and other unexpected project delays.
Namely, the Oslo-listed company estimates a prefunding drop from previously guided 150 percent to about 120 percent.
Polarcus’ current multi-client project in Brazil has been negatively impacted by poor weather conditions and extreme barnacle growth, which, according to the company, should extend the duration of the project into February 2017. The slower production rate on the project will negatively affect the recognition of committed prefunding in Q4 2016.
Additionally, during Q4 2016 the company has experienced standby time on certain vessels due to unforeseen permit delays on client projects. This will have a negative impact on the its utilization and revenue generation in the quarter, the company noted.
“High market competition is expected to continue in the near term resulting from the over-supply of vessel capacity relative to client tender volumes,” stated Rod Starr , Polarcus CEO. “In spite of the highly competitive market, we expect to secure additional awards before year end as a result of our offering of industry leading assets and intelligent project designs.”
Polarcus added that its estimated multi-client investment of USD 45 million for the full year 2016 remains unchanged.