TGS Sees Sales Growth of 25% as Exploration Spending Expands
TGS-Nopec Geophysical ASA (TGS), a Norwegian oilfield surveyor, expects sales to rise as much as 25 percent this year as energy explorers step up the search for deposits offshore.
Net revenue will reach $700 million to $760 million, up from $609 million in 2011, the Asker-based company said today in a statement. Surveys for individual clients will account for about 5 percent, while data sold in non-exclusive, or multiclient, permits will reap as much as $365 million, it said.
Oil and gas companies are investing in exploration in increasingly remote areas as traditional fields mature and new drilling techniques enable extraction in more hostile or complex environments. Surveyors such as TGS and its Norwegian competitor Petroleum Geo-Services ASA use seismic data to assess energy prospects for development.
“We continue to see growth in many of our new markets as well as existing areas,” Chief Executive Officer Robert Hobbs said in a presentation. TGS expects “significant” expansion off northwestern Australia and in U.S. shale, as well as growth in West Africa, the North Sea and the Arctic, the company said.
TGS fell 0.7 percent to close at 139.9 kroner in Oslo trading, after earlier rising as much as 2.1 percent.
Producers including BP Plc and Genesis Energy LP are seeking to expand in, or return to, the Gulf of Mexico following the April 2010 Macondo well blowout that caused the worst oil spill in U.S. history. Growth in the area may benefit surveyors such as TGS, according to RS Platou Markets AS.
“The U.S. Gulf of Mexico normalizing is likely to be a pivotal sales driver,” Goeran Andreassen, an analyst at RS Platou Markets, said in an e-mailed note. “We interpret the higher-than-anticipated revenue guidance as a confirmation of continued strong demand for seismic and multiclient data.”
TGS said an extraordinary impairment of a convertible loan of about $20 million will be charged in the fourth quarter.
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