PGS expects to report Segment* revenues for Q2 2020 of approximately $138 million. Contract revenues ended at approximately $31 million. MultiClient pre-funding revenues were approximately $66 million, from a capitalized cash investment of approximately $64 million, while MultiClient late sales were approximately $36 million.
"During Q2 we have announced significant changes to our operation and implemented cost measures to counter the lower activity level caused by the covid-19 pandemic and oil market disruptions. Our annual gross cash cost run rate is reduced to approximately $400 million, down 33% from the start of the year, based on five vessels in operation.
I am proud of the exceptional efforts from all our employees. We have managed to execute ongoing imaging and acquisition surveys according to plan and maintain focus on sales while facing the challenges caused by the pandemic and our ongoing downsizing", says President & CEO Rune Olav Pedersen.
PGS routinely releases information about 3D vessel utilization after the end of each quarter.
The Q2 2020 vessel statistics includes eight vessels. PGS Apollo and Sanco Swift were cold-stacked** during Q2 2020 and will be excluded from the statistics from Q3 2020 onwards, similar to the other cold-stacked vessels.
The Company provides this information based on a preliminary summary of Q2 2020 revenues. The Company has not completed its financial reporting and related consolidation, review and control procedures, including the final review of all sales against the established revenue recognition/cut-off criteria. The
estimates provided in this release are therefore subject to change and the Q2 2020 financial statements finally approved and released by the Company may deviate from the information herein.
PGS will release its Q2 2020 financial statements on Thursday July 23, 2020, at approximately 8:00am Central European Summer Time (CEST). A corresponding presentation is scheduled for 09:00am CEST the same day.
((*For the purpose of Segment reporting, MultiClient prefunding revenues are recognized on a percentage of completion basis, and the related amortization of MultiClient library is based upon the ratio of aggregate capitalized survey costs to forecasted sales. This differs from IFRS reporting which recognizes revenue from MultiClient prefunding agreements and related amortization at the "point in time" when the customer receives access to, or delivery of, the finished data. For further description of the principles applied, see details in the 2019 annual report.))
((**The term "cold-stacked" is used when a vessel is taken out of operation for an extended period of time. Costs are reduced to a minimum, with the vessel preserved for a long idle time, all or most in-sea seismic equipment removed from the vessel, and typically the Company does not have available crew to operate the vessel.) )