April 3, 2020: Oslo, Norway, The corona virus pandemic and the disruption in the
oil market present unprecedented challenges for the offshore services industry.
PGS is doing its utmost to ensure the health and safety of employees, their
families and other personnel, and to maintain uninterrupted operations. The
Company has implemented preventive measures and contingency plans, and is
managing all its activities in close dialogue with clients, authorities and
other relevant stakeholders.
So far, PGS have been able to continue vessel operations without interruptions.
Short-term, severe logistical challenges caused by travel restrictions and
quarantine provisions impacting crew-changes have been resolved by cancelling
all crew changes since March 18, with all crews continuing on a second full
rotation. The extended crew periods will start coming to an end in the latter
part of April, and the Company believes it will be able to find viable methods
for crew rotations.
The low oil price will have a material negative impact on demand for seismic
services and activity levels. The Company is implementing substantial cost and
capital expenditure measures to meet an expected significant revenue reduction.
Details relating to such measures will be provided in connection with the Q1
2020 earnings release on April 23, 2020. Meanwhile the following business update
is provided:
* To date PGS has not received contract cancellations. However, most processes
to conclude contract negotiations have since early March been substantially
delayed or resulted in postponement of projects;
* The Company has decided to cold-stack* two of the eight currently operated
3D vessels early in Q2, after completion of current projects. Further
capacity adjustments will be evaluated on an ongoing basis.
PGS completed a successful refinancing earlier this year and currently has a
substantial liquidity reserve. In order to maintain a strong liquidity position
while experiencing uncertain market conditions, the Company believes that it may
later in the year be prudent to seek extensions of the revolving credit facility
(RCF) reduction scheduled for September and/or other scheduled debt
amortization. The Company has drawn all of its RCF to hold its liquidity reserve
in cash.
PGS 2020 guidance and outlook statements published at the capital markets day on
January 30, 2020 is under review, and will be revised in connection with the
first quarter results on April 23, 2020.
((*The term "cold-stacked" is used when a vessel is taken out of operation for
an extended period of time. Costs are reduced to a minimum, with the vessel
preserved for a long idle time, all or most in-sea seismic equipment removed
from the vessel, and typically the Company does not have available crew to
operate the vessel. ))
FOR DETAILS, CONTACT:
Bård Stenberg, SVP IR & Corporate Communication
Mobile: +47 99 24 52 35
***
PGS ASA and its subsidiaries ("PGS" or "the Company") is a focused marine
geophysical company that provides a broad range of seismic and reservoir
services, including acquisition, imaging, interpretation, and field evaluation.
The Company MultiClient data library is among the largest in the seismic
industry, with modern 3D coverage in all significant offshore hydrocarbon
provinces of the world. The Company operates on a worldwide basis with
headquarters 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
(http://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 2019. 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.
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