Asker, Norway, October 8th, 2007 - Based on preliminary reporting from operating units, TGS management now expects net revenues for the third quarter of 2007 on the TGS standalone activity to be approximately the same as in the third quarter of 2006.
The full third quarter earnings release is scheduled for October 25th, 2007 and will also include the financial results of Wavefield-Inseis operations for last ten days of Q3 2007.
Third quarter revenues fell short of management's expectations due to productivity issues on the two newly delivered 3D vessels as well as difficulties in closing new Gulf of Mexico multi-client late sales commitments at the end of the quarter.
GeoBarents started operations in the Gulf of Mexico during the first week of August, but experienced a very high percentage of technical downtime from mid-August to mid-September. Since mid-September, performance has been very satisfactory. BGP Pioneer re-started operations in West Africa during the first week of August, but lost approximately one week of operational time in mid-September due to replacement of a malfunctioning fuel valve.
Multi-client late sales are often secured during the final weeks of a quarter. Our Gulf of Mexico customers were largely unavailable during that window this quarter due to the high level of focus and preparations for the record-setting Central Gulf of Mexico lease sale held on October 3rd. Management believes that this situation created a different buying pattern in Q3 and that its customers will now focus on the annual March lease sale leading to a more typical "Q4 effect" in multi-client activity.
TGS and Wavefield-Inseis continue to progress the merger process and expect the merger to close as planned in late November. Currently, the management teams are preparing a joint plan for the optimal deployment of vessels for Q4 and 2008. TGS plans to issue Q4-2007 guidance based on the activity of the merged entity as a part of its Q3 Earnings Release on October 25th.
CEO Hank Hamilton, VP Business Development John Adamick and CFO Arne Helland will host a conference call on October 9th at 15:00 Norwegian time (9:00 AM New York time). Norwegian attendees are invited to call 800 80 119 and international attendees are invited to call +47 23 000 400. Attendees may want to call 5-10 minutes before the start of the call to ensure registration and access. A Q&A session will follow a short introduction.
A replay of the Conference call will be available shortly after. To access replay of TGS's conference call, dial +47-67 89 40 91, enter account number 1193 followed by # (pound-sign) press 1 Conference no: 193 followed by # (pound-sign) press 1 to play.
TGS-NOPEC Geophysical Company (TGS) is a principal resource for global geoscientific data products and services in the E&P industry. TGS specializes in the design, acquisition and processing of multi-client seismic surveys worldwide and delivers advanced high performance seismic imaging and software solutions. The Company also provides the world`s largest online well-log database, well data management services, multi-client interpretive products and subsurface consulting services to industry. The suite of integrated exploration data products available from TGS is distinctive and unmatched. The Company philosophy is to create unique high-quality data collected in the right place at the right time.
All statements in this press release other than statements of historical fact are forward-looking statements, which are subject to a number of risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. These factors include TGS` reliance on a cyclical industry and principal customers, TGS` ability to continue to expand markets for licensing of data, and TGS` ability to acquire and process data products at costs commensurate with profitability. Actual results may differ materially from those expected or projected in the forward-looking statements. TGS undertakes no responsibility or obligation to update or alter forward-looking statements for any reason.
TGS-NOPEC Geophysical Company ASA is listed on the Oslo Stock Exchange (OSLO: TGS).
For more information about this news release, please contact:
Arne Helland
Chief Financial Officer
Tel: +47 66 76 99 31/+47 91 88 78 29
Email: arne.helland@tgsnopec.no
John Adamick
VP Business Development
Tel: +1 713 860 2100
Email: jada@tgsnopec.com