November 30, 2004: OSLO, NORWAY - Petroleum Geo-Services ASA ("PGS" or the "Company") (OSE: PGS; OTC: PGEOY) announced today its unaudited third quarter 2004 results under Norwegian generally accepted accounting principles ("Norwegian GAAP").
|
|
Quarter ended
September 30, |
Nine months ended
September 30, |
Year ended
December 31, | ||
|
(In millions of dollars) |
2004
Unaudited |
2003
Unaudited |
2004
Unaudited |
2003
Unaudited |
2003
Audited
(Restated) |
|
Revenue |
$ 308.3 |
$ 258.6 |
$ 838.2 |
$ 851.0 |
$ 1,120.7 |
|
Operating profit (loss) |
74.6 |
38.8 |
134.7 |
(130.4) |
(645.3) |
|
Net income (loss) |
28.2 |
0.8 |
1.4 |
(288.3) |
(817.2) |
|
Adjusted EBITDA (A) |
140.7 |
115.9 |
339.3 |
377.1 |
479.1 |
|
Cash investment in multi-client (B) |
(11.9) |
(22.1) |
(37.7) |
(82.0) |
(91.5) |
|
Capital expenditures (C) |
(41.0) |
(6.2) |
(103.4) |
(32.8) |
(57.7) |
|
Cash Flow Post Investment
(Defined as A+B+C) |
$ 87.8 |
$ 87.6 |
$ 198.2 |
$ 262.3 |
$ 329.9 |
Svein Rennemo, PGS Chief Executive Officer, commented, "Third quarter reflects significant improvement in revenues and financial performance both sequentially and year-on-year. All of our business units reported improved financial performance from the preceding quarter. Despite this clear improvement, we are not yet satisfied with the profitability and return on capital for all our operations. Notably, we continue to pursue improved returns for Marine Geophysical.
Our cash generation for the quarter was good, with cash flow from operations of $135.3 million and a $74.3 million increase in cash balances.
Despite negative impact from the labor conflict on the NCS and the damaged main riser on the Varg field, we expect to deliver a Cash Flow Post Investment for 2004 in line with $231 million forecasted in our Business Plan disclosed last year, both including and excluding Pertra.
In November we finalized the re-audit of our historical U.S. GAAP financial statements, thereby re-establishing a sound basis for communication to the financial markets and a re-listing of our ADSs in the US. "
Q3 Highlights
PGS group
- Completed and filed the 2003 Form 20-F on November 16, 2004
- Revenues of $308.3 million, up $49.7 million (19%) compared to Q3 2003
- Adjusted EBITDA of $140.7 million, up $24.8 million (21%) from Q3 2003
- Operating profit of $74.6 million, up $35.8 million (92%) from Q3 2003
- Net income of $28.2 million compared to $0.8 million in Q3 2003
- Improvement in revenues, Adjusted EBITDA and operating profit largely driven by strong improvement in Pertra and Production as a result of increased oil production from the Varg field and improved Petrojarl Varg production contract
- Favorable cash flow from operations, $ 135.3 million and ending cash balance of $151.5 million (excluding restricted cash of $45.1 million), up $74.3 million from June 30, 2004.
Marine Geophysical
- Contract revenues and margins significantly improved from first half of 2004
- Continued strong order backlog into the winter season of $95 million compared to $115 million at the end of Q2
- Multi-client sales in line with Q3 last year but at modest levels due primarily to seasonality
Onshore
- Continued strong operational performance
- High activity in the U.S. market with full crew schedule into April 2005
- Significant new opportunities in Eastern Hemisphere
- Order backlog going into Q4 of 2004 - $68 million
Production
- Significantly increased revenues on Petrojarl Varg due to increased production and improved production contract
- Slightly lower production on Petrojarl Foinaven due to planned maintenance shutdown and expected natural field production decline
- Lower production on Petrojarl I due to expected field production decline and impact of labor conflict from September 12 into October
Pertra
- Increased oil production at favorable prices
- Successful enhanced oil recovery ("EOR") drilling program on schedule
- Process initiated to explore broader ownership solutions to facilitate Pertra growth strategy
Outlook
Fourth Quarter 2004
- Continued focus on contract market in Marine Geophysical
- Slightly weaker contract margins and more vessel steaming expected in Q4 due to seasonality
- Strong multi-client late sales in Q4 assuming Brazil 6th round awards finalized as expected
- Minimum amortization of $15.5 million in addition to sales related amortization expected in Q4.
- Onshore reduced activity into Q4 because Mexico work was reduced from two to one crew during Q3
- For Production, Petrojarl Foinaven oil production expected to increase in Q4. Revenues on Petrojarl I and Ramform Banff are expected to be relatively unchanged in Q4.
- Varg production shut down October 13 to October 26, due to a labor conflict on NCS followed by a damaged main production riser November 5, will significantly affect Pertra revenues and revenues on the Petrojarl Varg FPSO
- Expected to meet $231 million Cash Flow Post Investment (Defined as adjusted EBITDA less CAPEX and cash investment in multi-client) for 2004 forecasted in previously disclosed Business Plan.
Longer Term
- Pertra and Production affected by Varg riser problem until riser is replaced, expected March 2005
- Marine Geophysical contract demand and margins improved going into 2005
- Natural field decline will affect revenues of several of the FPSOs
The financial information contained in this release has been prepared in accordance with Norwegian GAAP. The Company's primary basis of reporting is U.S. GAAP, and the Company expects to return to reporting its quarterly interim financial statements to the market on a U.S. GAAP basis effective with the release of its fourth quarter 2004 report. The Company filed its Annual Report on Form 20-F for the year ended December 31, 2003, including audited financial statements under U.S. GAAP for the years 2003, 2002 and 2001 on November 16, 2004. As disclosed in the separate press release issued November 16, 2004, in connection with finalizing the audited statements, PGS restated previously published U.S. GAAP audited consolidated financial statements for the year ended December 31, 2001. For a discussion of the Company's U.S. GAAP and Norwegian GAAP reporting, see the paragraphs "Basis of Unaudited Financial Statements" and "Restatements" below.
The presentation can be downloaded from the following link:
The full report including tables can be downloaded from the following link:
