TGS expects weaker income – increase in PGS

TGS expects weaker income – increase in PGS

– Although we are satisfied with achieving 14 percent annual revenue growth in 2023, we are disappointed by “lagging sales” in the fourth quarter, says TGS CEO Christian Johansen.

In a stock exchange announcement on Tuesday, Seismic said it expects IFRS-based revenue of $189 million in the fourth quarter, compared to $219 million in the same quarter of 2022.

TGS expects POC (percentage of completion) sales to reach $205 million this quarter, down from $227 million in the same period last year.

POC revenue was expected to be $284 million in the fourth quarter of 2023, according to the average estimate of seven analysts surveyed by TGS. The average POC sales volume estimate was $291 million, TDN Direkt wrote.

Positive until 2024

– Delayed licensing rounds, major companies focusing their exploration investments on drilling and obtaining new seismic data, as well as ongoing mergers and acquisitions among some of our key clients, partly explain why we did not see the normal turn-of-the-year investments in the fourth quarter, Johansen explains.

On the positive side, they have seen increased activity from independent businesses, and report receiving good orders.

– I am increasingly optimistic for 2024, based on positive signals from our clients. Our contract backlog at the beginning of 2024 is 21 percent higher than the previous year, and additional job opportunities look promising.

The opposite is true for PGS

As for PGS, it's the opposite: The company, which will soon be merged with TGS, expects revenue to increase in the fourth quarter.

PGS expects revenue on an IFRS basis to be $265 million, up from $216.7 million in the fourth quarter of 2022.

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Satisfied: CEO Rune Olaf Pedersen is particularly happy with the “lagging sales” in the fourth quarter. Photo: Ivan Kvermi

POC revenue was approximately $227 million in the quarter, compared to $251 million in the same quarter last year. However, it's more than expected in advance: According to estimates obtained by the company, POC sales were expected to reach an average of $208 million in the fourth quarter of 2023. The average estimate was $211 million, according to TDN Direct.

Contract revenue ended at approximately $84 million in the quarter, down from $111.2 million in the prior year's fourth quarter, and versus expectations of $73 million.

Particularly satisfied with the “late sales”

Revenue from “late sales” to several customers was about $82 million, down from $92 million, but more than the $79 million expected.

– I am pleased to see the “late sales” of many customers in the fourth quarter doubled compared to the average of the first three quarters of 2023. In addition, we recorded significant sales from surveys in the processing stage, says CEO Rune Olav Pedersen at PGS.

PGS had seven vessels in its 3D seismic fleet in the third and fourth quarters, and had 25 percent capacity utilization in the fourth quarter seismic contract, while it was 31 percent in multi-client seismic surveying.

TGS and PGS will report for the fourth quarter on February 15 at 7.00.

Dalila Awolowo

Dalila Awolowo

"Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff."

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