Third Quarter 2018 Results

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Note: Petroleum Geo-Services ASA and its subsidiaries ("PGS" or "the Company") implemented the new revenue recognition standard, IFRS 15, as the Company's external financial reporting method. This change, which took effect January 1st 2018, impacts the timing of revenue recognition for MultiClient pre-funding revenues and related amortization. For internal management purposes PGS continues to use the revenue recognition principles applied in previous years, which are based on percentage of completion, and use this for numbers disclosed as Segment Reporting. See Note 15 for definitions of terms discussed in this report. See Note 16 for a description of the change in revenue recognition resulting from the implementation of IFRS 15. PGS has not restated prior periods.

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Highlights Q3 2018

  • As Reported revenues of $163.4 million and an EBIT loss of $10.4 million, according to IFRS
  • Segment Revenues of $192.1 million, compared to $207.6 million in Q3 2017
  • Segment EBITDA of $132.8 million, compared to $108.6 million in Q3 2017
  • Segment EBIT loss of $2.7 million, compared to a loss of $30.4 million in Q3 2017
  • Segment MultiClient pre-funding revenues of $95.7 million with a corresponding pre-funding level of 94%, compared to $101.8 million and 124% in Q3 2017
  • Segment MultiClient late sales revenues of $56.0 million, compared to $47.8 million in Q3 2017
  • Cash flow from operations of $133.3 million, compared to $118.4 million in Q3 2017 
  • Total Leverage Ratio, as defined in the Company's Credit Facility, of 2.75:1

"With a majority of our vessel capacity allocated to MultiClient in the third quarter we invested more than $100 million in attractive MultiClient projects and continued to expand our MultiClient data library. We believe we will harvest from these investments in a strengthening market going forward. MultiClient late sales did not benefit from any specific license rounds in the third quarter. Going into the fourth quarter it is encouraging that our leads for MultiClient late sales are better than for many years.

Contract revenues in the third quarter reflect a still challenging market. However, the sentiment is improving and year-to-date we have achieved higher contract prices and margins compared to last year.

Despite a large opportunity pipeline for acquisition surveys, the process of formalizing projects and getting contracts signed has taken longer than expected. We are not satisfied with how the order book has developed during the quarter, ending at $144 million. We will operate six vessels during the winter in accordance with our plan for the year, but we will incur idle time in Q4 due to late commencement of some projects.

Looking beyond the near term challenge on vessel utilization our market view is unchanged. We believe fundamentals are improving; with a Brent blend oil price in excess of $80 per barrel the total value of bids and leads for contract work at its highest level for more than 3.5 years and a strong increase in MultiClient sales compared to last year."


Rune Olav Pedersen,
President and Chief Executive Officer


PGS expects the higher oil price, improved cash flow among clients and an exceptionally low oil and gas discovery rate to benefit marine seismic market fundamentals going forward. The Company continues to plan its cost and capital expenditures for 2018 to achieve positive cash flow post debt service1.

Based on current operational projections and with reference to disclosed risk factors, PGS expects full year 2018 gross cash costs of approximately $600 million.

2018 MultiClient cash investments are expected to be approximately $285 million.

Approximately 65% of 2018 active 3D vessel time is expected to be allocated to MultiClient acquisition.

Capital expenditure for 2018 is expected to be approximately $40 million.

The order book totaled $144 million at September 30, 2018 (including $110 million relating to MultiClient), compared to $187 million at June 30, 2018 and $167 million at September 30, 2017.

1 The financial target of being cash flow positive after debt servicing excludes payments relating to severance and other restructuring provisions made in Q4 2017 as well as drawings/repayments on the RCF.


Consolidated Key Financial Figures
(In USD millions, except per share data)

Quarter ended
September 30,
Nine months ended
September 30,

Year ended
December 31,





Profit and loss numbers Segment Reporting*          
Segment Revenues 192.1 207.6 589.3 602.9 838.8
Segment EBITDA 132.8 108.6 361.2 251.3 374.1
Segment EBIT ex. Impairment and other charges, net (2.7) (30.4) (11.7) (122.6) (147.1)
Profit and loss numbers As Reported under IFRS 15:          
Revenues 163.4 207.6 604.5 602.9 838.8
EBIT (10.4) (113.3) 13.0 (224.4) (383.6)
Income (loss) before income tax expense (28.6) (136.1) (43.3) (276.6) (468.1)
Net income (loss) to equity holders (35.4) (189.9) (64.4) (328.6) (523.4)
Basic earnings per share ($ per share) (0.10) (0.56) (0.19) (0.97) (1.55)
Other key numbers:          
Net cash provided by operating activities 133.3 118.4 328.6 197.8 281.8
Cash Investment in MultiClient library 101.9 82.0 236.9 159.4 213.4
Capital expenditures (whether paid or not) 14.1 16.6 26.4 131.1 154.5
Total assets 2,397.2 2,644.3 2,397.2 2,644.3 2,482.8
Cash and cash equivalents 44.4 24.2 44.4 24.2 47.3
Net interest bearing debt 1,149,0 1,113.2 1,149.0 1,113.2 1,139.4

For the definition of Segment Reporting see Note 14 of the unaudited third quarter 2018 results, released on October 18, 2018

A complete version of the Q3 2018 earnings release and presentation can be downloaded from and

Bård Stenberg, SVP IR & Communication
Phone:  +47 67 51 43 16
Mobile:  +47 99 24 52 35

Petroleum Geo-Services ("PGS" or "the Company") is a focused Marine geophysical company that provides a broad range of seismic and reservoir services, including acquisition, imaging, interpretation, and field evaluation. The Company's MultiClient data library is among the largest in the seismic industry, with modern 3D coverage in all significant offshore hydrocarbon provinces of the world. The Company operates on a worldwide basis with headquarters in Oslo, Norway and the PGS share is listed on the Oslo stock exchange (OSE: PGS). For more information on Petroleum Geo-Services visit

The information included herein contains certain forward-looking statements that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties. The Company is subject to a large number of risk factors including but not limited to the demand for seismic services, the demand for data from our multi-client data library, the attractiveness of our technology, unpredictable changes in governmental regulations affecting our markets and extreme weather conditions. For a further description of other relevant risk factors we refer to our Annual Report for 2017. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in the information given above about current status of the Company or its business. Any reliance on the information above is at the risk of the reader, and PGS disclaims any and all liability in this respect.

This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.

Contact Investor Relations

You are welcome to send us an email or call Bård Stenberg VP IR & Corporate Communications: +47 992 45 235