OSLO Norway (11 January 2021) - Based on preliminary reporting from operating units, TGS management expects net segment revenues for the fourth quarter of 2020 to be approximately USD 118 million.
Kristian Johansen, CEO at TGS, stated, “As expected, we saw a seasonal uptick in the activity level during Q4 and we are pleased to report a 61% sequential growth in late sales. While we continue to see signs of a gradual improvement, partly driven by a higher oil price, we remain cautious about the speed of a recovery, with only modest changes to E&P spending expected for 2021.
As a result of lowered long-term oil price assumptions, most of our largest clients have announced significant impairments and exploration write-offs during the past year. Lower oil price assumptions, capital constraints and more focused exploration strategies are expected to cause longer payback times for certain multi-client surveys, particularly in frontier areas with a lack of infrastructure and/or exposure to recent geopolitical changes. As a result, TGS is carrying out a thorough assessment of the accounting value of its library. While the review is still ongoing, the preliminary assessment indicates a non-cash impairment of between USD 70 and 90 million in Q4 2020.
With our efficient cost structure and strong balance sheet, with close to USD 200 million in cash, TGS is well positioned to continue combining dividend payments with sound strategic investments, further enhancing our position as the world’s leading subsurface data company.”
TGS will report the Q4 2020 financial results and host a Capital Markets Day on 11 February 2021.
About TGS TGS provides multi-client geoscience data to oil and gas Exploration and Production companies worldwide. In addition to extensive global geophysical and geological data libraries that include multi-client seismic data, magnetic and gravity data, digital well logs, production data and directional surveys, TGS also offers advanced processing and imaging services, interpretation products, machine learning solutions, and data integration solutions. For more information visit TGS online at www.tgs.com.
Forward Looking Statement All statements in this press release other than statements of historical fact are forward-looking statements, which are subject to several risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. These factors include TGS' reliance on a cyclical industry and principal customers, TGS' ability to continue to expand markets for licensing of data, and TGS' ability to acquire and process data product at costs commensurate with profitability, as well as volatile market conditions, which have been exacerbated by the COVID-19 pandemic and the severe drop in oil prices. Actual results may differ materially from those expected or projected in the forward-looking statements. TGS undertakes no responsibility or obligation to update or alter forward-looking statements for any reason.