PGS Announces Unaudited, Preliminary Results Under Norwegian GAAP for 4th Quarter and Full Year 2003

Generally the results for 2003 showed improvement over 2002 in terms of revenues, adjusted EBITDA, as defined, and cash flow post investment, as defined. However, the operating profit and net loss shown below reflects significant impairment charges in both 2003 and 2002, and in Q4 2003.

 

Highlights for 2003 are as follows:

 

Full year 2003 cash flow post investment, as defined, increased to $327.2 million from $209.3 million in 2002 reflecting improved adjusted EBITDA, as defined, and significantly reduced cash investment in multi-client library.

For Q4 2003, cash flow post investment, as defined, decreased to $63.7 million from $85.4 million in Q4 2002, due to reduced cash flow from Marine Geophysical partly offset by improved cash flow from Onshore and Pertra.

Fourth quarter Marine Geophysical cash flow was negatively affected by lower than anticipated late sales in Brazil and vessels steaming as well as yard stays, partly offset by continued good contract market performance.

Q4 2003 cash flows for Onshore were improved due to improved project management while Pertra cash flows improved due to increased production  and higher oil price   

 

Summarized unaudited, preliminary results under Norwegian GAAP for the fourth quarter and full-year 2003 are set forth below.  This information (including 2002 financial information audited under Norwegian GAAP) is subject to adjustment, and any such adjustment could be material.  Accordingly, this information should be read in conjunction with, and is subject to the significant qualifications discussed below.

 

 

 

 

(In millions of dollars)	Q4 2003 Unaudited	Q4 2002 Unaudited	Full-year 2003 Unaudited	Full-year 2002 Audited
Revenues	260.5	261.7	1,111.5	992.3
Operating profit (loss)	(498.5)	6.1	(629.6)	(718.8)
Net income (loss)	(522.4)	(120.7)	(814.1)	(1,245.7)
Adjusted EBITDA, as defined (A)	99.4	127.1	477.7	460.5
CAPEX (B)	(24.6)	(7.2)	(57.4)	(60.8)
Cash investments in multi-client (C)	(11.0)	(34.5)	(93.0)	(190.4)
Cash flow post investment A+B+C)	63.7	85.4	327.2	209.3

 

 

 

*   Q4 revenues of $260.5 million, comparable with Q4 2002

*   Full year adjusted EBITDA, as defined, of $477.7 million up $17.2 million from 2002. Q4 adjusted EBITDA, as defined, of $99.4 million, down 22% from Q4 2002

*   Full-year 2003 cash flow post investment, as defined, of $327.2 million, up $117.9 million from 2002. Q4 cash flow post investment, as defined, of  $63.7 million, down $21.7 million from Q4 2002.

*   Impairment charges totaling $496.6 million recognized in Q4, in line with "fresh start" reporting under U.S. GAAP as the Company emerged from Chapter 11 proceedings and as announced by the Company on January 23, 2004

*   Completed financial restructuring and consummated Chapter 11 proceedings November 5, 2003. Interest bearing debt reduced by $1,283 million

*   Arranged $110 million working capital facility in March 2004

*   Distributed 1st installment of excess cash of $19.0 million in December 2003

*   Changes implemented in accounting policies to increase transparency of financial reporting reduces comparability between periods

 

 

 

*   Lower cash flow in Marine Geophysical was caused by reduced multi-client late sales, caused by a delay in the announcement of the Brazil 6th licensing round terms, and significant vessel steaming to start new surveys

*   Onshore showed significant improvement due to improved project management

*   Production had stable performance on all fields after resolution of Petrojarl Foinaven compressor problem late October 2003

*   Pertra performing above expectations due to continuing high production volumes and favorable oil prices.  Q4 reported adjusted EBITDA, as defined, positively impacted by $13.5 million downward revision of abandonment obligation

*   Pertra enhanced oil recovery drilling program confirmed substantial reserve additions for the field, which could result in a significant prolongation for the Petrojarl Varg FPSO contract

*   The production contract for Ramform Banff was significantly amended and improved (subject to approval by Banff and Kyle licenses)

*   Cost cutting program is on track with substantial cost reductions in Marine Geophysical