CGG Cuts Spending on Crude Drop After Quarterly Loss NarrowsTara Patel
CGG SA’s second-quarter loss narrowed and the French oilfield seismic surveyor will make further spending reductions as exploration companies cut their own investments and delay projects amid falling crude prices.
The net loss was $61 million compared with $325 million a year earlier when the company took restructuring charges, CGG said in a statement Friday. Sales dropped to $473 million from $689 million. It will lower 2015 spending by $50 million more than previously announced. Investment during the period was $115 million, down from $256 million last year.
“Market conditions will remain difficult in the coming months,” Chief Executive Officer Jean-Georges Malcor said on a conference call. “Customers are delaying projects and trying to lower their costs. The pressure on prices is strong.”
The surveyor is suffering from a drop in demand as oil explorers such as Total SA cut budgets to hunt for new reserves and defer orders for seismic studies to preserve cash. CGG deploys equipment to measure sound waves and find oil and gas deposits, including under water.
As part of a cost-cutting plan, CGG is on track to eliminate jobs, Malcor said. The surveyor will have eliminated about 2,000 positions worldwide, bringing its workforce to about 7,700 by the end of the year. CGG has also reduced its fleet size to 11, down from 18 vessels at the end of 2013 and a peak of 23.
CGG’s order backlog remained stable at just under $1 billion at the end of the quarter compared with the previous quarter, Malcor said on the call.
Oil-services provider Technip SA approached CGG last year about a combination of the two French companies specialized in providing equipment and studies for the energy industry. The surveyor rejected the bid.
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