Sept. 13 (Bloomberg) -- Norwegian surveyors of underwater oil and gas fields, including Petroleum Geo-Services ASA and Polarcus Ltd., gained in Oslo as rates resist downward pressure amid a potential slowdown in spending by energy companies.
TGS Nopec Geophysical Co., Electromagnetic GeoServices AS, PGS and Polarcus were among the five biggest climbers on the Oslo stock exchange’s OBX index of 25 most-traded stocks today. PGS rose the most in seven weeks, EMGS climbed to a three-week high and Polarcus advanced to the highest intraday level in more than three weeks.
PGS, Norway’s second-largest seismic surveyor, said average marine contract pricing is currently up 10 percent to 15 percent from a year ago and that the 2014 North Sea season is “firming up with good pricing development.” The company has an order backlog of $535 million, up from $446 million, and an improving backlog, it said in a presentation on its website today.
EMGS, which uses electromagnetic rather than seismic technology to search for oil and gas under the seabed, also got a letter of intent for a deal worth a minimum of $8 million in West Africa, it said today. “Based on demand from both new and existing customers, we expect to deploy EM Leader in the region for a longer period,” Chief Executive Officer Roar Bekker said.
Seismic surveyors have seen profit rise as energy companies operating off Africa, Norway and South America spent more on exploration. Analysts, including those at Bank of America Merrill Lynch, have warned that those gains are now at risk as oil prices struggle to reach records reached in 2008, squeezing earnings.
‘Lack of Confidence’
Shares in Norway’s seismic companies slumped last month after BofAML downgraded its outlook for the industry due to an “increasing lack of confidence that the recovery in seismic can make material progress in the face of a number of headwinds.” As well as increased competition, “pricing expectations are being scaled back and we question the level of exploration capex for data acquisition going forward.”
Oil prices have stayed above $100 a barrel since early July amid concern that Middle Eastern supplies may be disrupted. West Texas Intermediate crude will probably rise next week on concern that tension in Syria will disrupt Middle East supplies, a Bloomberg survey showed.
The Middle East accounted for 35 percent of global oil production in the first quarter of this year, according to the International Energy Agency. Syria borders Iraq and is near Iran, countries that together hold almost a fifth of the output capacity from the Organization of Petroleum Exporting Countries.
PGS gained as much as 3.8 percent and traded 3.5 percent higher at 81.75 kroner as of 11:05 a.m. in Oslo. TGS, Norway’s largest surveyor, gained 1.1 percent to 191 kroner, Polarcus rose 3.2 percent to 4.49 kroner and EMGS advanced 3 percent to 8.135 kroner.
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