PGS ASA: First Quarter 2023 Results
Strong Acquisition Revenues in a Recovering Seismic Market
Highlights Q1 2023
Produced Revenues (see Note 1 and 2) of $172.2 million, compared to $140.3 million in Q1 2022
Produced EBITDA of $71.5 million, compared to $55.9 million in Q1 2022
Revenues and Other Income according to IFRS of $143.1 million, compared to $136.2 million in Q1 2022
EBIT (ex. impairments and other charges, net) according to IFRS a loss of $16.1 million, compared to a loss of $20.6 million in Q1 2022
Cash flow from operations of $134.4 million, compared to $63.4 million in Q1 2022
Cash and cash equivalents of $154.1 million
Completed refinancing and reduced interest-bearing debt by $245 million
Awarded the first ultra-high resolution offshore windfarm site characterization project, sealing the entry into a strategically important new energy market
Rigging Ramform Victory for seismic data acquisition in Brazil
“In Q1 2023 our Produced Revenues increased 23% year-over-year, driven by higher contract revenues and strong pre-funding for ongoing MultiClient acquisition projects. We used a majority of vessel time on attractive contract work with pricing continuing on a positive trend. For our MultiClient projects we secured strong client commitments and report a pre-funding level of 130% in the quarter, well above our targeted range.
MultiClient late sales fluctuate between quarters and were low in Q1, primarily due to delays in completing several sales transactions. However, we expect these processes to close in the coming quarters and our late sales expectations for the full year are unchanged.
We completed our refinancing in Q1 by issuing a new $450 million senior secured bond with a 4-year tenor. The proceeds, together with cash on the balance sheet, were used to repay $600 million of our Term Loan B. In total we have reduced interest-bearing debt by $245 million in the quarter. We have a strong liquidity reserve and cash flow generation, and I am confident we will continue to improve our capital structure going forward.
The seismic market is in recovery, and we are increasingly benefiting from the improving market fundamentals.”
Rune Olav Pedersen,
President and Chief Executive Officer
PGS expects global energy consumption to continue to increase over the longer term with oil and gas remaining an important part of the energy mix, as the global energy transition evolves. Offshore reserves will be vital for future energy supply and support demand for marine seismic services. The seismic market is recovering on the back of increased focus on energy security, several years of low investment in new oil and gas supplies, and higher oil and gas prices.
Offshore investments in oil and gas exploration and production are expected to increase in 2023. The seismic acquisition market is likely to benefit from the higher exploration and production spending, and a limited supply of seismic vessels.
PGS expects full year 2023 gross cash costs to be approximately $550 million. The increase from 2022 is primarily due to the higher activity level and more capacity in operation.
2023 MultiClient cash investments are expected to be approximately $160 million.
Approximately 60% of 2023 active 3D vessel time is expected to be allocated to contract work.
Capital expenditures for 2023 is expected to be approximately $100 million.
The Order book amounted to $377 million on March 31, 2023. On December 31, 2022, and March 31, 2022, the Order book was $416 million and $315 million, respectively.
Produced EBIT ex impairments and other charges, net
Profit and loss numbers, As Reported
Revenues and Other Income
EBIT ex. Impairment and other charges, net
Net financial items
Income (loss) before income tax expense
Income tax expense
Net income (loss) to equity holders
Basic earnings per share ($ per share)
Other key numbers
Net cash provided by operating activities
Cash Investment in MultiClient library
Capital expenditures (whether paid or not)
Cash and cash equivalents
Net interest-bearing debt
Net interest-bearing debt, including lease liabilities following IFRS 16
A complete version of the Q1 2023 earnings release and presentation can be downloaded from www.newsweb.no or www.pgs.com.
The webcast can be accessed from this link:
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PGS ASA and its subsidiaries (“PGS” or “the Company”) is an integrated marine geophysics company, which operates on a world-wide basis. PGS business supports the energy industry, including oil and gas, offshore renewables and carbon storage. The Company’s headquarter is in Oslo, Norway and the PGS share is listed on the Oslo stock exchange (OSE: PGS). For more information on PGS visit www.pgs.com.
The information included herein contains certain forward-looking statements that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties. The Company is subject to a large number of risk factors including but not limited to the demand for seismic services, the demand for data from our multi-client data library, the attractiveness of our technology, unpredictable changes in governmental regulations affecting our markets and extreme weather conditions. For a further description of other relevant risk factors we refer to our Annual Report for 2022 and the Q1 2023 earnings release. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in the information given above about current status of the Company or its business. Any reliance on the information above is at the risk of the reader, and PGS disclaims any and all liability in this respect.