TGS Announces Q4 2020 Earnings Update

Source: www.gulfoilandgas.com 1/11/2021, Location: Europe

Based on preliminary reporting from operating units, TGS management expects net segment revenues for the fourth quarter of 2020 to be approximately USD 118 million.

Kristian Johansen, CEO at TGS, stated, “As expected, we saw a seasonal uptick in the activity level during Q4 and we are pleased to report a 61% sequential growth in late sales. While we continue to see signs of a gradual improvement, partly driven by a higher oil price, we remain cautious about the speed of a recovery, with only modest changes to E&P spending expected for 2021.

As a result of lowered long-term oil price assumptions, most of our largest clients have announced significant impairments and exploration write-offs during the past year. Lower oil price assumptions, capital constraints and more focused exploration strategies are expected to cause longer payback times for certain multi-client surveys, particularly in frontier areas with a lack of infrastructure and/or exposure to recent geopolitical changes. As a result, TGS is carrying out a thorough assessment of the accounting value of its library. While the review is still ongoing, the preliminary assessment indicates a non-cash impairment of between USD 70 and 90 million in Q4 2020.

With our efficient cost structure and strong balance sheet, with close to USD 200 million in cash, TGS is well positioned to continue combining dividend payments with sound strategic investments, further enhancing our position as the world’s leading subsurface data company.”

TGS will report the Q4 2020 financial results and host a Capital Markets Day on 11 February 2021.


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