Petroleum Geo-Services Q2 Performance Likely to be Weaker

By Joseph R. Fonseca
Monday, July 14, 2014


Oslo, Norway, Petroleum Geo-Services ASA (PGS) will present second quarter results on July 24, 2014. The Company expects to report weaker Q2 results than current market expectations.

Customers' intentions with regard to seismic purchases, particularly MultiClient, have become less predictable recently. Accordingly, and considering the Q2 results, PGS lowers its full year EBITDA guidance to circa $850 million. It should be noted that because of this reduced predictability, the uncertainty range around the EBITDA guidance is wider than normal.
The weak Q2 results are mainly driven by lack of pre-funding for the Triton MultiClient survey in the Gulf of Mexico and to some extent by mobilization delays on some Marine Contract surveys, relating to permitting, weather and technical problems.
The Company expects to report consolidated Q2 revenues of approximately $335 million; EBITDA of approximately $170 million and EBIT before impairments of approximately $55 million.  In addition, an impairment charge of approximately $10 million is expected related to vessel and equipment retirement.
With the exception of the delay in securing pre-funding for the Triton survey, MultiClient pre-funding is progressing well. Excluding investment in the Triton survey, the Q2 pre-funding for the remaining MultiClient portfolio is approximately 150% of capitalized MultiClient cash investment.
With respect to Triton, a fast track product from the survey is now available and the Company expects sales to be closed during 2H.
The Company provides this information based on preliminary consolidated Q2 2014 numbers. The Company has not completed all review and control procedures relating to its quarterly reporting, and significant evaluations have not yet been concluded, including tax provisions. The estimates provided in this release are therefore subject to change and the Q2 2014 financial statements finally approved and released by the Company may deviate materially from the information herein.
A more complete review of financial performance and market perspectives will be provided at the issuance of the Company's Q2 2014 Earnings Release on July 24, 2014.

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