PGS has reported a third quarter net loss of $32 million on revenues of $116 million, compared to a net loss of $111 million on revenues of $139 million in Q2 and a net profit of $31.5 million on revenues of $234 million in Q3 2019.
PGS has reported a third quarter net loss of $32 million on revenues of $116 million, compared to a net loss of $111 million on revenues of $139 million in Q2 and a net profit of $31.5 million on revenues of $234 million in Q3 2019.
The company made an operating loss of $4.3 million, compared to an operating loss of $82 million in Q2 2020 and an operating profit of $50 million in Q3 2019.
PGS reported multiclient prefunding levels of $50.4 million, with a prefunding level of 89%, compared to prefunding of 94.9 million with a prefunding level of 125% in Q3 2019. Multi-client late sales of $28.3 million compared with $53.9 million in Q3 2109. Contract revenues of $9.3 million compared with $76.3 million in Q3 2019. Imaging revenues of $4.5 million compared to $8.7 million in Q3 2019.
Rune Olav Pedersen, PGS president and chief executive officer, said: ‘The widespread disruptions in the oil market and the significant reduction in energy companies’ 2020 budget continued to impact the seismic market in the third quarter. Our vessel utilization ended at 71%, of which a large majority was allocated to multi-client. The standby time of 11% reflects the dramatic reduction of activity levels and challenge of securing acquisition projects into the winter season.
‘The revised and significantly lower 2020 investment plans among energy companies have significantly reduced demand for seismic services. A majority of the reduction is postponements to 2021 and beyond, in order for the energy companies to protect cash flow in a period where the Covid-19 pandemic has caused extreme disruptions in the oil market.
‘To preserve liquidity and secure business continuity we have over the last months engaged and negotiated with our lenders. Towards the end of the quarter we announced an agreement in principle with a majority of them on main terms. I am pleased that we have now signed up with a sufficient majority of lenders and will proceed to swiftly implement the agreement on a consensual basis if we achieve 100% support from lenders. Alternatively, the solution will be implemented by using a UK scheme of arrangement, for which we have support from the required super majority of lenders. No debt maturities and no scheduled debt amortization until September 2022, together with our substantial cost reductions, will improve our liquidity and enable us to manoeuvre through these challenging times.’
The company has reduced annual gross cash costs by more than 33% to below $400 million. Cash flow from operations of $65.9 million, compared to $151.9 million in Q3 2019.
Based on five 3D vessels operated for the remaining part of 2020, PGS expects full-year 2020 gross cash costs to be below $450 million, excluding severance and other restructuring costs of approximately $35 million.
2020 multi-client cash investments are expected to be approximately $225 million. Capital expenditure for 2020 is expected to be below $40 million.
The order book totalled $160 million at September 30, 2020 (including $52 million relating to multi-client). The order book was $155 million at June 30, 2020 and $336 million at September 30, 2019.
