Norwegian provider of multi-client geoscience data to oil and gas companies, TGS, posted a drop in profit and revenues for the second quarter of the year but expects improvement in the longer term as the demand-supply balance continues to tighten.
The multi-client company on Thursday reported a net income of $16.8 million for the second quarter this year, compared to $24.5 million in the prior-year quarter.
Operating profit for the quarter was $22 million, versus $36 million posted in 2Q 2015.
Furthermore, TGS reported net revenues of $114 million in 2Q 2016, down from $139.6 million in 2Q 2015.
However, when compared to the first quarter 2016 and revenues of $64 million, TGS’ revenues were up 79% in 2Q 2016.
According to the company, this improved performance in 2Q 2016 compared to preceding quarters reflects a slight improvement in oil companies’ willingness to invest in seismic data as well as cost control and rightsizing initiatives implemented by the company, adjusted personnel and other operating costs down 30% from 2Q 2015.
TGS’ backlog amounted to $103 million at the end of 2Q 2016, a decrease of 57% from 2Q 2015.
The company noted that, although some improvement has been experienced since late 2015 and early 2016, the challenging market conditions are expected to continue near term, with high volatility between quarters and across regions.
TGS concluded that, following the unprecedented reduction in exploration activity in the past couple of years, it is likely that oil companies will return to exploration spending in the longer term as the demand-supply balance continues to tighten.
Offshore Energy Today Staff