TGS is expecting net segment revenues for the fourth quarter of 2020 to be approx.
TGS is expecting net segment revenues for the fourth quarter of 2020 to be approx. $118 million and will book a no-cash impairment of up to $90 million on the value of its multi-client library.
Ahead of the company’s results presentation on 11 February, Kristian Johansen, CEO at TGS, said: ‘As expected, we saw a seasonal uptick in the activity level during Q4 and we are pleased to report a 61% sequential growth in late sales. While we continue to see signs of a gradual improvement, partly driven by a higher oil price, we remain cautious about the speed of recovery, with only modest changes to E&P spending expected for 2021.
‘As a result of lower long-term oil price assumptions, most of our largest clients have announced significant impairments and exploration write-offs during the past year. Lower oil price assumptions, capital constraints and more focused exploration strategies are expected to cause longer payback times for certain multi-client surveys, particularly in frontier areas with a lack of infrastructure and/ or exposure to recent geopolitical changes. As a result, TGS is carrying out a thorough assessment of the accounting value of its library. While the review is still continuing, the preliminary assessment indicates a non-cash impairment of between $70 and $90 million in Q4 2020.
‘With our efficient cost structure and strong balance sheet, with close to $200 million in cash, TGS is well positioned to continue combining dividend payments with sound strategic investments, further enhancing our position as the world’s leading subsurface data company.’
