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MarketScreener Homepage  >  Equities  >  Oslo Bors  >  PGS ASA    PGS   NO0010199151

PGS ASA

(PGS)
  Report
Real-time Estimate Quote. Real-time Estimate CHI-X - 10/28 08:37:05 am
2.543 NOK   -3.67%
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PGS : Pareto Securities Energy Conference 2020

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09/16/2020 | 04:30am EDT

Pareto Securities

Virtual Energy Conference

September, 2020

Cautionary Statement

  • This presentation contains forward looking information
  • Forward looking information is based on management assumptions and analyses
  • Actual experience may differ, and those differences may be material
  • Forward looking information is subject to significant uncertainties and risks as they relate to events and/or circumstances in the future
  • This presentation must be read in conjunction with other financial documents published by PGS and the disclosures therein

-2-

Resetting Cost Base for Unexpected 2020 Demand Reduction

  • Unprecedented oil market disruption immediately reduced seismic activity
    • Projects deferred rather than cancelled
  • Executing secured acquisition and imaging programs according to plan
  • Resetting cost base and reducing capex to a minimum
  • In negotiations with RCF banks and other lenders

-3-

Annualized Cost Base of ~ USD 400 Million from Q3 2020

USD million

700

~600

600

500

-33%

~400

400

300

200

100

0

2020 Initial Plan

Annualized run rate from Q3 2020 with 5 vessels

  • Annualized gross cash cost run rate of ~USD
    400 million, down 33% from start of 2020:
    • Reducing vessel capacity from 8 to 5 vessels
    • Streamlining the organization and reducing office based personnel by ~40%
    • Multiple other initiatives
  • Potential to reduce cost by another ~USD 40 million in a 4 vessel scenario

4

Business Areas After Reorganizing

Sales & Services

Technology &

Operations

MultiClient, Contract

Digitalization

Fleet management,

and Imaging

R&D, Enterprise IT,

Project Delivery, Seismic

Digitalization portfolio

Acquisition & Support

  • No changes to executive team
  • Profitability, reliability and quality
  • Lean structure for responsive service
  • Flexible vessel and imaging capacity
  • Efficient project planning and delivery
  • Technology drives digital transformation

5

Committed to Integrated Service Offering

MultiClient Players

Integrated Services

Contract Players

Integration improves business opportunities by

  • Flexible business models
  • Leveraging customer engagement
  • Faster delivery
  • Acquisition and Imaging R&D

6

Digital Transformation Accelerates Strategy Execution

Progressing well on:

- Processing of seismic data in the cloud

- Launch of cloud-based MultiClient sales platform

- Vessel speed and equipment maintenance

- Machine Learnings and Artificial Intelligence for subsurface data analytics

Capitalizing on digitalization to:

- Reduce turnaround time

- Reduce operating cost and increase operating efficiency

- Improve customer engagement and interaction

- Develop new business opportunities for data owners and customers

7

In Process with Lenders

  • PGS has presented a proposal to its lenders:
    • Seeking to amend maturities and amortization across the different debt facilities
    • Seeking to amend RCF leverage covenant for a certain period
  • The proposal aims to:
    • Preserve liquidity
    • Maintain business continuity
    • Ensure full repayment to all lenders
  • Have received feedback from all lenders and in negotiations to reach an acceptable solution for all stakeholders

8

Significant Demand Drop - Now Rebounding

2500

2000

1500

USD million

1000

500

0

Active Tenders Marine Contract

All Sales Leads Marine Contract (Including Active Tenders)

PGS In-house Contract Bids+Leads

Contract bids to go (in-house PGS) and estimated $ value of bids + risk weighted leads as of August 2020

  • Significant and rapid decline in seismic contract leads and tenders late Q1 and in Q2
    • Projects postponed rather than cancelled
  • Leads recently showing a significant rebound, with majority of work indicated for 2021
  • Q4 2020 expected to be weak, respite likely early next year

9

Supply Reducing Further

Number of streamers

700

600

500

  • Average 2020 capacity expected to decline ~20% vs. average 2019

400

300

  • Industry capacity likely to be reduced to ~15 vessels during winter season
    • Expect moderate capacity

200

100

0

Q1 13

Q1 14

Q1 15

Q1 16

Q1 17

Q1 18

Q1 19

Q1 20

Q1 21

increase for 2021 summer season

Source: PGS internal estimates

10

Summary

  • Resetting cost base and reducing capex to a minimum
  • In negotiations with RCF banks and other lenders
  • Challenging short-term market outlook with substantial E&P spending reduction
  • Pent up demand from postponed projects likely to benefit 2021

11

Thank You

September, 2020

Disclaimer

PGS - Petroleum Geo-Services ASA published this content on 16 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 September 2020 07:29:06 UTC


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Financials (USD)
Sales 2020 548 M - -
Net income 2020 -257 M - -
Net Debt 2020 1 015 M - -
P/E ratio 2020 -0,48x
Yield 2020 -
Capitalization 111 M 112 M -
EV / Sales 2020 2,06x
EV / Sales 2021 1,99x
Nbr of Employees 1 256
Free-Float 100,0%
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Mean consensus UNDERPERFORM
Number of Analysts 13
Average target price 0,32 $
Last Close Price 0,29 $
Spread / Highest target 89,3%
Spread / Average Target 12,0%
Spread / Lowest Target -24,4%
EPS Revisions
Managers
NameTitle
Rune Olav Pedersen President & Chief Executive Officer
Walter Hafslo Qvam Chairman
Rob Adams Executive Vice President-Operations
Gottfred Langseth Chief Financial Officer & Executive Vice President
Anne Grethe Dalane Vice Chairman
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