TGS Nopec Geophysical ASA (TGS) fell the most in a month in Oslo after a weaker-than-expected number of bids in the latest oil and gas licensing round in the Gulf of Mexico indicated lower demand for the seabed maps TGS sells.
TGS, based in Asker near Oslo, declined as much as 2.6 percent to 221 kroner, the biggest intraday drop since Feb. 21. That made Norway’s largest seismic surveyor the biggest loser on the Oslo stock exchange’s OBX index today after Renewable Energy Corp. ASA (REC), a solar energy components maker.
The Bureau for Ocean Energy Management received 407 bids from oil and gas explorers in its latest licensing round for the U.S. Central Gulf of Mexico, it said yesterday. That compares with a combined 593 bids received for the delayed two rounds eventually held in June last year.
“We are seeing a trend of fewer companies submitting bids” because of a higher proportion of deep water blocks, which limits their potential interest to the larger explorers, RS Platou Markets AS analyst Thomas Oerner said in an e-mail. “The important factor will in our opinion be the dollar value of attracted bids, not necessarily the number of bids.”
Oil and gas producers operating in the waters off Africa, Norway and South America are boosting spending on exploration amid growing energy demand. With established fields maturing and new resources harder to find, TGS is betting on growing demand for the underwater maps it creates indicating the possible location of oil and gas in regions including the Gulf of Mexico.
“We think the drop in TGS is unjustified, as TGS managed to sell exceptionally well in the fourth quarter from its data set in the U.S. Gulf of Mexico, given the lower volume of bids,” said Platou’s Oerner, who has a buy rating on the stock. The BOEM is scheduled to announce the dollar value of the bids later today.
TGS has gained 44 percent in the past 12 months, giving it a market value of 22.9 billion kroner ($3.9 billion). That makes it Norway’s largest seismic surveyor, replacing Lysaker-based Petroleum Geo-Services ASA (PGS), which has a value of 19.8 billion kroner.
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