OSLO, Norway, Dec. 19, 2007 (PRIME NEWSWIRE) -- Petroleum Geo-Services ASA ("PGS" or the "Company") announced today that, compared to the guidance given in the Company's interim financial report for Q3, the expected Q4 productive time and related revenues and margins in the marine contract segment have been reduced. This is primarily due to longer than scheduled yardstays and steaming for two Ramform vessels and a delay in obtaining operational permits for one Ramform vessel.
The Company's expectations for a strong full year 2008 has been further strengthened through several significant contract awards, at terms well above 2007 level bringing the Company's order backlog up to a total of approximately $950 million for the marine and onshore segment combined, the highest ever.'
The Company also announced that it has been invited to deliver additional services relating to Ramform Victory after the sale to the Japanese Ministry of Economy, Trade and Industry ("METI"), including the maritime operation of the vessel, and that delivery of the vessel is now expected shortly after year-end.
Q4 vessel utilization
After relocating Ramform Explorer from the North Sea to India during November to start a multi season acquisition contract, the Company has experienced permitting delays caused by the high activity level in the area, leading to approximately 20 days of unpaid standby in December.
Ramform Challenger and Ramform Valiant, as previously disclosed, have been completing yard stays and 10-year classing in Q4. In total the number of yard days, and related steaming, has increased compared to PGS' earlier estimates.
As of today, the Company expects its marine 3D streamer activity for Q4, not counting Ramform Victory which ended operations mid October, to be approximately as follows:
* Contract seismic 46% * Multi-client seismic 23% * Steaming 12% * Yard 17% * Standby 2%
The Company now expects steaming, yard and standby to be around 31% of total capacity, compared to its previous guidance of 22-25%. The Company expects the 2007 full year marine contract EBIT margin to be marginally below 50%.
Steaming, which is seasonally higher in Q4, is mostly considered in contract pricing, but revenue recognition is made over the active acquisition period causing the financial benefit to be realized subsequent to the steaming period. The relocations done in Q4 are expected to benefit utilization and the number of planned active production days in the first part of 2008.
METI transaction
In relation to the agreement with METI to sell Ramform Victory and provide ongoing technology and operational services, PGS has been asked to provide certain additional services, including the maritime operation of the vessel. If the parties agree on this increased scope, this will provide substantial benefits for both parties, allowing for increased crew continuity as well as the ability to leverage PGS' broader resource base to secure efficient and uninterrupted operations. The delivery of the vessel is likely to occur in January 2008, consequently PGS expects the gain relating to sale of the vessel to be recognized in Q1 2008 and not in Q4 2007 as earlier disclosed. The payment of the 50% advance on the sales price is still expected to be received before year-end. Since PGS plans for its Norwegian vessel owning company to enter the new tonnage tax rules in Norway, PGS expects the gain on sale to be tax free.
Petroleum Geo-Services is a focused geophysical company providing a broad range of seismic and reservoir services, including acquisition, processing, interpretation, and field evaluation. The company also possesses the world's most extensive multi-client data library. PGS operates on a worldwide basis with headquarters at Lysaker, Norway.
For more information on Petroleum Geo-Services 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 as disclosed by the Company in its Annual Report on Form 20-F for the year ended December 31, 2006, as filed with the U.S. Securities and Exchange Commission. As a result of these factors, actual events may differ materially from those indicated in or implied by such forward-looking statements.