OSLO, Norway, May 4, 2006 (PRIMEZONE) -- Petroleum Geo-Services ASA ("PGS" or the "Company") (OSE:PGS) (NYSE:PGS) announced today its unaudited first quarter 2006 results under U.S. GAAP.
-- Further substantial strengthening of operating profit:
Operating profit of $118.5 million, up $79.1 million compared to
Q1 2005 (pro forma excluding Pertra and the gain from
sale of Pertra)
-- Marine Geophysical performance raised to new levels:
Contract revenues doubled from Q1 2005 with average contract EBIT
margin approaching 40%. Multi-client late sales developing
favorably with a 20% increase over Q1 2005
-- Onshore delivering healthy results:
Operating profit of $9.9 million, up $8.0 million compared to
Q1 2005 as a result of improved contract earnings and strong
multi-client late sales
-- Production impacted by lower volumes than anticipated on the
Varg field:
Operating profit of $12.4 million, down $3.1 million from Q1 2005
-- PGS shareholders approved demerger:
The extraordinary general meeting April 28, 2006, approved the
Company's previously announced demerger plan. Consequently, we are
proceeding towards establishing our Production segment as a
separately listed company named Petrojarl ASA and expect to
complete the distribution of 80.01% of the shares in
Petrojarl ASA to our shareholders and sell up to the remaining
19.99% in an offering on or about June 30, 2006
Key figures as reported
Quarter ended Year ended
March 31, December 31,
2006 2005 2005
Unaudited Unaudited Audited
(In millions of dollars)
Revenues $ 377.5 $ 285.0 $ 1,196.3
Operating profit/EBIT 118.5 189.6 335.4
Net income 70.3 155.4 112.6
Earnings per share ($
per share) 1.17 2.59 1.88
Adjusted EBITDA (as
defined) 158.9 91.6 416.9
Net cash provided by
operating activities 72.6 73.6 279.1
Cash investment in
multi-client (10.0) (9.9) (55.7)
Capital expenditures (54.5) (15.2) (90.5)
Total assets (period
end) 1,772.1 1,918.6 1,717.6
Cash and cash
equivalents (period end) 123.7 332.1 121.5
Net interest bearing
debt (period end) $ 808.6 $ 791.9 $ 828.7
Pro forma key figures(1) excluding Pertra
Quarter ended Year ended
March 31, December 31,
2006 2005 2005
Unaudited Unaudited Unaudited
(In millions of dollars)
Revenues $ 377.5 $ 258.7 $ 1,170.1
Operating profit/EBIT 118.5 39.4 177.7
Adjusted EBITDA
(as defined) $ 158.9 $ 85.0 $ 410.3
(1) Pro forma key figures as presented in the table show revenues,
operating profit (loss) and Adjusted EBITDA as if Pertra had not been part
of the consolidated PGS group of companies for any of the periods
presented. Pertra was sold March 1, 2005.
Svein Rennemo, PGS Chief Executive Officer, commented:
"The markets for our services exhibit a strength that exceeds historical experience. Our strong market position and operating performance produced very strong results in the first quarter. The continued trend of improved demand and prices for our Marine Geophysical services confirm and strengthen our expectations of strong earnings in 2006 and 2007.
"Our marine seismic performance was excellent in the first quarter with the fleet fully dedicated to contract work. Contract revenues more than doubled from the same period last year to a record level of $185.3 million, with the average EBIT margin for contract work approaching 40 percent. For the full year contract EBIT margins are expected to stay around this level. In the coming quarters we plan to use significantly more of our fleet capacity to acquire multi-client data implying relatively lower contract revenues. Our multi-client investments are expected to be made at historically high pre-funding levels.
"Our Onshore operations have reached stable production rates on new contracts in the North African market. Generally good crew continuity in other regions, as well as improved multi-client late sales, produced healthy results in the first quarter and we expect full year results in 2006 to be substantially stronger than 2005.
"Revenues and results in our Production segment were weaker than we expected at the start of the year. As a result of reservoir and well related issues, the output from the Varg field is significantly lower than earlier forecasts. These issues are expected to continue at least well into Q3. Daily production volume is currently at levels which would allow us to terminate the production contract with 90 days notice and we have initiated discussions with Talisman aiming to improve the current compensation structure. We are also frontloading our efforts of exploring redeployment opportunities for Petrojarl Varg. As a result of the low expected production volume on Petrojarl Varg and seasonal increase in operating expenses, we expect weak results in Q2 for Production.
Our extraordinary general meeting approved the separation of our Geophysical and Production businesses. We are proceeding towards establishing Petrojarl ASA as a separately listed company, and we expect to distribute 80.01% of the shares in Petrojarl ASA to our shareholders and sell up to the remaining 19.99% in an offering on or about June 30, 2006."
The full report can be downloaded from the following link: http://hugin.info/115/R/1048896/172976.pdf