PGS Sees Improved Profits for Third Consecutive Year in 2013

Petroleum Geo-Services ASA (PGS), the world’s third-largest oil and gas fields seismic surveyor, expects to improve profits for a third straight year in 2013 as oil companies increase exploration.

The Lysaker, Norway-based company expects a “strong” summer season in the North Sea thanks to larger demand and fewer vessels in the north Atlantic, Chief Executive Officer Jon Erik Reinhardsen said today.

“The finds that have been made the last 12 to 15 months have ensured that the North Sea market probably will remain the biggest market in the world, despite being a very mature area,” he said in an interview after presenting the company’s third- quarter results, which beat analyst estimates.

PGS raised its guidance for earnings before interest, taxes, depreciation and amortization for 2012 to about $800 million. Reinhardsen said Ebitda and operating and net income would all increase next year, following gains in 2012 and 2011.

Seismic surveyors are benefiting from record investments in Norway, spurred by finds in the North Sea and expanding exploration in Arctic areas off the country’s northern tip. Investment in the country’s oil and gas industry is expected to rise by 10 percent to a record 204 billion kroner ($35.6 billion) next year, according to a quarterly survey of oil companies by Statistics Norway.

Fully Booked

PGS’ capacity is fully booked for the fourth quarter of this year, 90 percent booked for the first quarter of 2013 and 75 percent booked for the second quarter, Reinhardsen said. These surveys will mainly take place in other parts of the world than the North Sea, he said.

The operating income margin should increase by 10 percentage points in the first half of next year compared to the “high end” of a range of 15 percent to 20 percent this year, Reinhardsen said.

PGS said net income rose to $87 million in the third quarter from $13 million a year earlier, beating an average analyst estimate of $64 million. Sales rose to $388 million from $340 million a year earlier, while Ebitda rose to $222 million from $153 million.

The shares rose as much as 4.2 percent, the most in more than three weeks, and traded 1.4 percent higher at 95.3 kroner as of 1:13 p.m. in Oslo.

The company will announce its guidance for next year at its capital markets day Dec. 18. A Bloomberg survey of 26 analysts shows Ebitda is expected at an average of $977 million, up from $830 million this year, while net income is expected to reach $332 million, up from $184 million.

To contact the reporter on this story: Mikael Holter in Oslo at mholter2@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net

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