PGS Announces Unaudited 2004 Fourth Quarter and Preliminary Full Year Results Under Norwegian GAAP
25 Februar 2005 - 3:28PM
PR Newswire (US)
PGS Announces Unaudited 2004 Fourth Quarter and Preliminary Full
Year Results Under Norwegian GAAP OSLO, Norway, Feb. 25
/PRNewswire-FirstCall/ -- Petroleum Geo-Services ASA ("PGS" or the
"Company") (OSE and NYSE: PGS) announced today its unaudited 2004
fourth quarter and preliminary full year results under Norwegian
generally accepted accounting principles ("Norwegian GAAP"). * 2004
Cash flow post investment well above previous guidance * Strong
multi-client late sales and improved contract sales drive Q4
revenue and Adjusted EBITDA improvement in Marine Geophysical *
Substantial gain on the sale of Pertra -- leading to greater
financial flexibility Key Norwegian GAAP figures as reported
+-------------------------------------------------------------------+
| | Quarter ended December | Years ended December | | | 31, | 31, |
|-----------------+------------------------+------------------------|
| | 2004 | 2003 | 2004 | 2003 | | | Unaudited | Unaudited |
Unaudited | Audited | | (In millions of | | | | (Restated) | |
dollars) | | | | |
|-----------------+------------+-----------+-----------+------------|
| Revenue | $ 300.8 | $ 269.6 | $ 1,131.1 | $ 1,120.7 |
|-----------------+------------+-----------+-----------+------------|
| Operating | (38.2) | (514.9) | 96.5 | (645.3) | | profit (loss) |
| | | |
|-----------------+------------+-----------+-----------+------------|
| Net income | (49.3) | (528.5) | (52.1) | (819.1) | | (loss) | | |
| |
|-----------------+------------+-----------+-----------+------------|
| Adjusted EBITDA | 94.5 | 101.9 | 433.8 | 479.1 | | (A) | | | | |
|-----------------+------------+-----------+-----------+------------|
| Cash investment | (4.0) | (9.4) | (41.7) | (91.5) | | in
multi-client | | | | | | (B) | | | | |
|-----------------+------------+-----------+-----------+------------|
| Capital | (42.1) | (25.0) | (145.6) | (57.7) | | expenditures | |
| | | | (C) | | | | |
|-----------------+------------+-----------+-----------+------------|
| Cash Flow Post | | | | | | Investment | $ 48.4 | $ 67.5 | $ 246.5
| $ 329.9 | | (Defined as | | | | | | A+B+C) | | | | |
+-------------------------------------------------------------------+
Key Norwegian GAAP figures excluding Pertra segment to be
discontinued (Pro forma)
+-------------------------------------------------------------------+
| | Quarter ended December | Years ended December | | | 31, | 31, |
|----------------+------------------------+-------------------------|
| | 2004 | 2003 | 2004 | 2003 | | | Unaudited | Unaudited |
Unaudited | Unaudited | | (In millions | | | | | | of dollars) | |
| | |
|----------------+------------+-----------+------------+------------|
| Revenue | $ 294.0 | $ 255.0 | $ 1,018.4 | $ 1,048.9 |
|----------------+------------+-----------+------------+------------|
| Operating | (3.9) | (523.5) | 63.9 | (681.4) | | profit (loss) |
| | | |
|----------------+------------+-----------+------------+------------|
| Adjusted | 100.4 | 82.4 | 353.4 | 418.2 | | EBITDA (A) | | | | |
|----------------+------------+-----------+------------+------------|
| Cash | (4.0) | (9.4) | (41.7) | (91.5) | | investment in | | | |
| | multi-client | | | | | | (B) | | | | |
|----------------+------------+-----------+------------+------------|
| Capital | (19.9) | (13.7) | (61.6) | (23.5) | | expenditures | |
| | | | (C) | | | | |
|----------------+------------+-----------+------------+------------|
| Cash Flow Post | | | | | | Investment | $ 76.5 | $ 59.3 | $ 250.1
| $ 303.2 | | (Defined as | | | | | | A+B+C) | | | | |
+-------------------------------------------------------------------+
Svein Rennemo, PGS Chief Executive Officer, commented, "We
delivered a Cash Flow Post Investment, excluding Pertra, for 2004
of $250 million, better than our earlier guidance of around $230
million, despite the negative impact from the labor conflict on the
Norwegian Continental Shelf and the damaged main riser on the Varg
field. Fourth quarter performance reflects improvement in our
Marine Geophysical operations which benefited from the first stages
of a market undergoing improvement. At the beginning of 2005 our
order backlog is substantially improving both in amount and
associated expected margins. The finalization of the re-audit of
our historical U.S. GAAP financial statements and subsequent
re-listing of our ADSs on the New York Stock Exchange in December
mark important milestones in delivering our restructuring
commitments and normalizing our communication with, and access to,
capital markets. The agreement to sell Pertra marks PGS' exit from
its successful E&P venture, which started in 2001. PGS was
formed as an oil service company and with this exit from E&P,
PGS will once again become fully focused on its oil service
business with strategic focus on geophysics and floating production
operations. We are credible industry leaders in both these areas,
with strong market share, client relationships and technological
expertise. The main goal for 2005 is to improve the return on these
assets. We expect to use a portion of our favorable cash position
and the proceeds from the Pertra sale to reduce debt." Q4
Highlights PGS group * Revenues of $300.8 million, up $31.2 million
(12%) compared to Q4 2003, driven by strong multi-client late sales
and improved contract revenues in Marine Geophysical * Adjusted
EBITDA, excluding Pertra, of $100.4 million, up $18.0 million (22%)
* Operating loss of $38.2 million, impacted by significant Pertra
loss and additional non-sales related amortization of the Marine
and Onshore multi-client library of $22.3 million * Net loss of
$49.3 million * Cash flow from operations, $42.6 million after
interest payments of approximately $52 million. Net
interest-bearing debt of $995.3 mill Marine Geophysical * Strong
multi-client late sales totaling $91.5 million, twice Q4 2003
levels ($45.8 million), due to strong demand and realization of
uplifts (success payments) from earlier license sales * Contract
revenues at acceptable levels considering seasonally high level of
vessel movements, $76.2 million compared to $70.0 million in Q4
2003 * In keeping with the Company's conservative accounting policy
for multi-client sales, recorded $19.4 million in additional non
sales related amortization of the multi-client library related to
minimum amortization and reduced or delayed forecasted sales for
certain individual surveys * Strong order backlog improvement with
year-end marine acquisition backlog of $170 million compared to $95
million at the end of Q3 Onshore * Low activity level due to
reduction of Mexican activities as previously announced * Weak
results primarily due to reduced activity and difficult weather
conditions in North America * Order backlog at year-end at $66
million compared to $68 million at the end of Q3 Production * Low
revenues on Petrojarl Varg caused by production shut down from
October 13 to October 26 due to labor conflict followed by damage
to the main riser November 5, limiting production to a maximum of
approximately 15,000 barrels per day * Increased production on
Ramform Banff following development work on the Banff field and tie
in of Kyle field well * Production on Petrojarl Foinaven increased
from Q3 but declined year over year by natural field production
decline * Lower production on Petrojarl I due to natural field
production decline and impact of labor conflict from September 12
to October 29 Pertra (To be discontinued operation effective
January 1, 2005) * Operating loss of $34.3 million * Oil production
negatively impacted by production shut down from October 13 to
October 26, due to labor conflict followed by damage to the main
riser November 5, limiting the Varg field production to a maximum
of approximately 15,000 (or 10,500 for Pertra's 70% share) barrels
per day * Dry "Villmink" exploration well charged to expense as
depreciation charge -- $11.4 million * Depreciation of capitalized
development cost accelerated by approximately $11.8 million due to
reduction on proved reserves (based on SEC guidelines). Outlook
Full Year 2005 * Marine Geophysical -- Increasing impact from
Marine 3D market near full capacity utilization expected during
2005 -- Multi-client late sales lower than 2004 due to limited
reinvestment over the past three years and expected delay of Brazil
7th Round sales into 2006 -- Cost levels impacted by increased fuel
prices and depreciation of USD currency compared to 2004 * Onshore
-- Onshore full year activity level at par with 2004, building on
expected Q2 start-up of significant transition zone project in
Eastern Hemisphere and contract awards for South America crews *
Production -- Total oil production from the four FPSO's expected to
be in line with 2004, assuming Varg riser replaced in Q1. --
Increased operating cost as maintenance CAPEX is expensed and time
since deployment of all FPSO's on their respective fields is
increasing. In addition USD currency has depreciated compared to
2004 * Pertra operations and estimated sales gain of approximately
$140 million to be reported as discontinued operations effective
January 1, 2005 The financial information contained in this release
is preliminary and unaudited and has been prepared in accordance
with Norwegian GAAP to be consistent with financial information
released in the first three quarters in 2004. The Company's primary
basis of reporting is U.S. GAAP, and the Company expects to provide
quarterly financial information for 2004 on a U.S. GAAP basis when
the audit of the 2004 U.S. GAAP financial statements is competed,
and return to using U.S. GAAP for its earnings releases effective
with the first quarter 2005 report. The Company's financial
statements based on U.S. GAAP could be materially different from
the Company's financial statements based on Norwegian GAAP. The
full report can be downloaded from the following link:
http://hugin.info/115/R/982302/146011.pdf FOR DETAILS, CONTACT: Ola
Bosterud Sam R. Morrow Phone: +47 6752 6400 US Investor Services:
Renee Sixkiller, Phone: +1 281 679 2240 DATASOURCE: Petroleum
Geo-Services ASA CONTACT: Ola Bosterud or Sam R. Morrow,
+47-6752-6400; Renee Sixkiller, US Investor Services,
+1-281-679-2240 Web site: http://www.pgs.com/
http://hugin.info/115/R/982302/146011.pdf
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