OSLO, Norway, Oct. 26, 2006 (PRIMEZONE) -- Petroleum Geo-Services ASA ("PGS" or the "Company") (OSE:PGS) (NYSE:PGS) announced today its unaudited third quarter 2006 results under U.S. GAAP.
-- Strong earnings momentum maintained: Operating profit of $95.2
million, up $50.4 million (113%) compared to Q3 2005. Revenues up
54%
-- Record order backlog: Order backlog increased to $767 million
following success in acquiring 2007 North Sea work at stronger
rates and margins than 2006 and awards of large studies in the
Gulf of Mexico and Qatar
-- Continued strong Marine performance: Continued growth in operating
profit despite significant increase of vessel deployment in the
multi-client segment. Strong development in contract prices and
pre-funding levels drives performance
-- Onshore at all time high in profitability: Operating profit of
$13.7 million, the third consecutive quarter with robust
performance
-- Substantial cash flow and debt reduction: Cash flow from
operations of $170.4 million. Net interest bearing debt reduced by
$220.3 million to $268.2 million in Q3. The Company plans to call
for an extraordinary general meeting before year end to establish
a share buy-back authorization of up to 10% of the share capital
Key figures 1
Quarter ended Nine months ended Year ended
September 30, September 30, Dec. 31,
2006 2005 2006 2005 2005
(In millions of Unaudited Unaudited Unaudited Unaudited Unaudited
dollars, except
per share data)
Revenues $ 326.1 $ 211.4 $ 947.5 $ 623.9 $888.0
Operating profit/EBIT 95.2 44.8 292.5 113.3 130.2
Income (loss) before
income tax expense
(benefit) and
minority interest 73.5 22.1 239.8 45.2 (68.6)
Net income 107.6 22.4 219.9 201.6 112.6
Earnings per share
($ per share) 1.79 0.37 3.67 3.36 1.88
Adjusted EBITDA (as
defined) 161.0 80.0 440.7 221.5 324.4
Net cash provided by
operating activities 170.4 116.8 358.7 213.6 279.1
Cash investment in
multi-client library 38.7 18.8 70.0 49.6 55.7
Capital expenditures 41.3 14.2 98.6 51.1 90.4
Total assets (period
end) 1,087.2 1,752.7 1,087.2 1,752.7 1,717.6
Cash and cash
equivalents (period
end) 101.2 190.8 101.2 190.8 121.5
Net interest bearing
debt (period end) $ 268.2 $ 728.0 $ 268.2 $ 728.0 $ 828.7
(1) Following the completion of the demerger and public offering of Petrojarl on June 29, 2006, the Key figures reflects, for all periods presented, a presentation of the operations of the Production segment and the gain from sale of Petrojarl shares, as discontinued operations. Total assets include Production assets up to the date of the demerger.
Svein Rennemo, PGS President and Chief Executive Officer, commented:
"Through the third quarter 2006 we have seen a further strengthening in pricing and contractual terms for our Marine contract business. Onshore delivered its best quarterly result ever and the multi-client pre-funding levels achieved in Marine were at a record high. Both Marine and Onshore experienced strong multi-client late sales.
"The EBIT margin on marine contract acquisition increased from the previous quarter to around 37 percent. The margin was negatively impacted by the previously announced loss of one month production from Ramform Victory. Excluding the impact of this incidence the overall margin was 44%. For the full year we expect Marine contract EBIT margins around 40 percent, as previously guided.
"The continued trend of improved demand and prices for seismic services confirm and strengthen our expectations of strong earnings through 2007. Early bidding and successful awards on record level prices for the 2007 North Sea season combined with awards of two large surveys, in the Gulf of Mexico and Qatar, have increased our backlog to the highest level ever. Overall, we expect prices and margins in 2007 to exceed 2006 and we already see work for 2007 being rolled over to 2008."
Q3 Highlights
PGS group
-- Revenues of $326.1 million, up $114.7 million (54%) from Q3 2005,
driven by a sharp increase in both Marine and Onshore
-- Operating profit of $95.2 million, up $50.4 million (113%) from Q3
2005 (which included a net gain of $5.8 million relating to one-off
items)
-- Income (loss) before income tax expense (benefit) and minority
interest of $73.5 million compared to $22.1 million in Q3 2005
-- Net income of $107.6 million (including gain from discontinued
operations of $55.4 million), compared to $22.4 million in Q3 2005
(including gain from discontinued operations of $12.3 million)
-- Cash flow from operations of $170.4 million, up $53.6 million from
Q3 2005
-- Net interest bearing debt of $268.2 million at September 30, 2006,
down $220.3 million in Q3, driven by the strong cash flow from
operations and proceeds from the sale of 20% of the shares in
Petrojarl
Marine
-- Total revenues of $254.3 million, up $83.3 million (49%) from Q3
2005
-- Contract acquisition revenues of $121.3 million, up $13.7 million
(13%) from Q3 2005, despite a reduction of the proportion of
vessels capacity used for contract acquisition from 73% to 50% (of
total streamer capacity)
-- Operating margin for marine contract seismic around 37%, negatively
impacted by loss of one month production on Ramform Victory and
related yard expenses
-- Multi-client late sales of $50.4 million, up $15.8 million (46%)
from Q3 2005
-- Multi-client pre-funding revenues of $69.7 million, up $52.3
million (301%) from Q3 2005, due to very strong pre-sales combined
with a significant increase in multi-client investment level
-- Operating profit of $89.9 million, up $39.9 million (80%) from Q3
2005 (which included a net gain of $4.3 million relating to one-off
items)
-- Order backlog at September 30, 2006 of $635 million compared to
$297 million at September 30, 2005 and $405 million at June 30,
2006. The backlog number includes $147 million of committed
pre-funding on scheduled multi-client projects
-- Exercised option to build a second third generation Ramform vessel
for delivery in the second quarter 2009. The first new build is
scheduled for delivery in the first quarter 2008
Onshore
-- Revenues of $71.0 million, up $32.6 million (85%) from Q3 2005
-- Operating profit of $13.7 million compared to a loss of $3.6
million in Q3 2005
-- Performance improvement driven by strong contract and multi-client
performance in North America and on three acquisition crews in
North Africa
-- Order backlog at September 30, 2006 of $132 million compared to
$147 million at September 30, 2005 and $140 million at June 30,
2006
Outlook 2006
Marine
-- Full year streamer contract EBIT margins are expected to be around
40%
-- The Company plans to use approximately 20% of active 3D capacity
for multi-client acquisition in the fourth quarter at lower
pre-funding levels than the first nine months due to the nature of
projects
-- Full year cash investments in multi-client library expected to
amount to approximately $70-80 million, with pre-funding levels
significantly higher than 2005
-- Multi-client late sales expected to be around the level achieved in
2005. Forecasting multi-client late sales for individual periods
involves a high degree of uncertainty as a result of the nature of
the business
-- Planned capital expenditures of approximately $130-140 million,
primarily related to streamer expansion and replacement program and
the project to build the first third generation Ramform vessel for
delivery early 2008
Onshore
-- Revenues and operating profit expected to be significantly above
2005 levels
-- Full year cash investments in multi-client library expected to be
approximately $30 million
-- Full year capital expenditures of approximately $13-15 million
The full report can be downloaded from the following links: http://hugin.info/115/R/1083736/188369.pdf
Q3 2006 support tables -- http://hugin.info/115/R/1083736/188372.pdf
Q3 Table 2006.pdf -- http://hugin.info/115/R/1083736/188375.pdf