Norway’s Electromagnetic Geoservices ASA (EMGS) on Thursday recorded a net loss and reduced revenues for the third quarter of 2015 as opposed to the third quarter of 2014, due to negative effects of extraordinary costs related to its cost reduction program.
EMGS’ revenues for the quarter amounted to $16.3 million, versus $41.7 million in the third quarter of 2014.
Furthermore, the geophysical services company reported a net loss of $25.4 million in 3Q 2015, compared to a net income of $7 million in the third quarter 2014.
Vessel utilisation for the third quarter 2015 came in at 64% compared with 69% for the third quarter in 2014, the company said.
EMGS says it is currently undergoing an extensive cost cutting program, and has revamped and tailored its sales organization in order to meet exploration needs and strengthen its competitive position.
CEO of EMGS, Stig Eide Sivertsen, said: “We have had a difficult financial quarter, like the rest of the oil service industry, but we have been able to reduce the underlying cost base to a level which we deem appropriate with the current market outlook.”
The market outlook continues to be difficult to predict, EMGS said, and the company prepares for a prolonged negative market sentiment lasting into 2016 and 2017, as contract negotiations are delayed and the oil companies’ spending and budgets are further revised and reduced.
“Although the geophysical market is currently not very receptive in adopting new technology, the company believes that positive responses will materialise in higher demand for EM services when the oil market returns to equilibrium. To meet the current market conditions, EMGS Board and management continues the work to reduce the company’s cost level, preserve cash and mitigate balance sheet risk,” the company said.