Petroleum Geo-Services (PGS) has seen its profits slashed in the third quarter as it suffered from a weak seismic market and falling oil prices.
The company attributed the “cautious spending behaviour” of firms to its losses, which it said had continued to impact bidding, pricing and utilization.
President Jon Erik Reinhardsen said during the next year the company would face the most uncertainty in its MultiClient late sales.
Mr Reinhardsen said: “We have during Q3 experienced deteriorating market conditions, including a weakening of the oil price.
“The cautious spending behaviour among oil companies continues to negatively impact bidding, pricing and utilization.
“Despite the challenging market environment we have delivered solid marine contract performance.
“The benefits of attractive rates secured well in advance and good production levels drove a significant improvement in marine contract EBIT margins from the first half of the year, rising to 27%.
“However, in MultiClient we experienced lower sales than expected.
“The shortfall is primarily due to lack of pre-funding from the Triton MultiClient survey in the Gulf of Mexico.
“Subsequent to Q3 we have signed up the first Triton pre-funding.
“This combined with a well pre-funded portfolio of other MultiClient projects, and the visibility we have with 90% of Q4 capacity already booked, although at lower rates, forms the basis for our projected Q4 earnings.
“The main uncertainty for the full year now relates to MultiClient late sales.
“Considering the weaker market we adjust our full year EBITDA (earnings before Interest , taxes, depreciation and amortization) guidance to approximately $725 million.”
In comparison to the third quarter of last year, EBITDA was $181.7million, compared to $216million in 2013.
The company’s earnings before interest and tax, excluding impairments were $77.5million, compared with $108.3million last year.
PGS also sold its Pacific Explorer and decommissioned the Nordic Explorer, while Atlantic Explorer was rigged down to 2D, providing cost savings of $10million.
The company has a presence in 25 countries with offices in London, Houston and Singapore.
The company’s headquarters is in Norway
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