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PGS plans debt refinancing as seismic market rebounds
Seismic vessel owner PGS expects to refinance its debt in 2023 as the market and demand improves, as does its fleet utilisation
Investment in exploration and field developments, along with new opportunities from carbon-storage geoservices and offshore renewables, means the management team of Oslo-listed PGS have a confident outlook for 2023.
PGS’ revenues rose from US$704M in 2021 to US$825M in 2022 and its orderbook for seismic survey work was US$517M on 31 December 2022, an increase of 74% in 2022 to its highest level since 2014.
“The recovering seismic market is evident from our financial numbers,” said PGS president and chief executive Rune Olav Pedersen. “The orderbook reflects increasing rates and higher activity, and we expect both to continue on a positive trend in 2023.”
The seismic acquisition market is likely to benefit from higher offshore exploration and production spending and a limited supply of seismic vessels in 2023.
“With increasing cash flow generation and strong shareholder support, we have reduced our net debt significantly and we are well positioned to refinance during 2023,” said Mr Pedersen.
Net interest-bearing debt was reduced by US$320M, or 34%, to US$617M by the end of 2022.
“We are experiencing a strong renewed focus on exploration, including frontier areas,” said Mr Pedersen. “This benefits both our contract and multi-client acquisition activity and contributed to a strong increase of contract revenues and easier access to prefunding for new multi-client projects.”
Sales from PGS’ multi-client survey data were the second highest on record and almost 50% higher than in 2021.
PGS expects its investments in multi-client surveys in 2023 to be around US$160M and its capital expenditure about US$100M.
Approximately 60% of the 3D survey vessel time in 2023 is expected to be allocated to contract work.
In the 2D seismic survey market, SeaBird Exploration has gained an extension to a contract it is progressing within the eastern hemisphere. This adds around 20% to the original contracted volume, while the contribution to expected profit margins is higher due to the impact on overall project efficiencies from the extension.
Get ready for OSJ Week 2023, kicking off with the European Dynamic Positioning Conference and Offshore Wind Journal Conference on 7 February, followed by the Annual Offshore Support Journal Conference, Awards & Exhibition on 8-9 February 2023 in London. Book your reservation here.
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