Norwegian seismic acquisition company Electromagnetic Geoservices ASA (EMGS) has announced a reduction in its cost base “in line with a reduced level of activity.” The company said this would lead to layoffs.
The company said on Wednesday it would seek a global reduction in employee expenses of approximately 20% by using both temporary and permanent layoffs amongst others. The cost reduction measure will yield effects gradually as headcount reductions onshore and offshore are scheduled to follow a different timeline, EMGS said without providing details.
“The market is expected to continue to be subdued until the oil price recovers and customers increase their E&P budgets. Cost reductions and cost control will, therefore, continue to be important focus areas in the company. However, we will maintain a footprint in our core markets to be able to efficiently market our services and be ready when the market turns,” says Christiaan Vermeijden, CEO of EMGS.
The company last week said its vessel utilization for the third quarter 2016 was 52% compared with 63% for the third quarter in 2015. In the third quarter of 2016, the company’s vessels were allocated 31% to multi-client projects and 21% to a funded research and development project. No vessel capacity was spent on contract work. In the comparable quarter of 2015, the
vessels were allocated 16% to contract work and 48% to multi-client projects.