January 10, 2023, Oslo, Norway: Based on a preliminary review, PGS expects to report Revenues and Other Income according to IFRS for Q4 2022 of approximately $217 million, compared to $210.4 million in Q4 2021. The Company expects Revenues and Other Income on a percentage-of-completion basis (“Produced Revenues”) for Q4 2022 of approximately $251 million, compared to $174.3 million in Q4 2021.
PGS will in connection with the Q4 2022 financial statements disclose alternative performance measures (“APMs”) on a percentage-of-completion basis, including Produced Revenues, to reflect MultiClient value creation. PGS will measure its revenues on a produced basis for its internal management reporting and consequently this will also be the basis for Segment Reporting in financial statements. The definition and reconciliation of Produced Revenues is provided at the end of this update*.
Contract revenues ended at approximately $111 million in Q4 2022, compared to $64.3 million in Q4 2021. MultiClient late sales revenues were approximately $92 million in Q4 2022, compared to $80.9 million in Q4 2021.
MultiClient pre-funding revenues based on IFRS were approximately $9 million in Q4 2022, compared to $60.0 million in Q4 2021. Estimated MultiClient pre-funding measured on percentage-of-completion basis (“Produced Pre-funding Revenues”) in Q4 2022 was $43 million compared to $23.9 million in Q4 2021.
“Our Q4 Produced Revenues increased 44% year-over-year and are another confirmation of an improving marine seismic market. MultiClient late sales were strong in the quarter, driving full year 2022 late sales to approximately $327 million, which is the second-best year on record, and almost 50% higher than 2021. Following relocation of most of our vessels early in the quarter, production has been strong. Contract rates continue to improve, and our Q4 contract revenues are the highest since Q4 2014. MultiClient Produced Pre-funding Revenues reflect strong industry support of ongoing projects, as well as good sales from projects where imaging is not yet completed,” says President & CEO Rune Olav Pedersen.
PGS routinely releases information about 3D vessel utilization after the end of each quarter. The table below summarizes Q4 2022 vessel allocation:
Approximate allocation of PGS operated 3D towed streamer capacity | Quarter ended December 31, | Quarter ended September 30, | |
| 2022 | 2021 | 2022 | |
| Contract seismic | 63% | 44% | 60% |
| MultiClient seismic | 12% | 14% | 28% |
| Steaming | 16% | 3% | 9% |
| Yard | 3% | 7% | 3% |
| Stacked/Standby | 6% | 32% | 0% |
The Q4 2022 vessel statistics includes six active 3D vessels. All cold-stacked** vessels are excluded from the statistics. The comparative periods are also based on six active 3D vessels.
The Company provides this information based on a preliminary summary of Q4 2022 numbers. 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 criteria. The estimates provided in this release are therefore subject to change and the Q4 2022 financial statements finally approved and released by the Company may deviate from the information herein.
PGS will publish its Q4 2022 earnings release and capital markets day presentation on Thursday January 26, 2023 at approximately 07:00am Central European Time (CET). Presentation of the Q4 2022 results and capital markets day material is scheduled to start at 09:00am CET the same day.
*From January 1, 2022, PGS changed its Segment Reporting measurement to simplify external and internal reporting.
PGS will in connection with the Q4 2022 financial statements disclose alternative performance measures (“APMs”) on a percentage-of-completion basis. PGS will report Produced Revenues, Produced EBITDA and order book relating to future production. PGS will measure its revenues on a produced basis for its internal management reporting and consequently this will also be the basis for Segment Reporting in financial statements. PGS believes that the introduction of these APMs will improve transparency and provide better information financial statement users.
The APMs reflect the difference between recognizing MultiClient pre-funding revenues under IFRS compared to alternatively measuring such revenues on a percentage-of-completion basis as the project is progressing, which is a non GAAP measure. IFRS 15 reporting generally recognizes revenue from MultiClient pre-funding agreements at the “point in time” when the customer receives access to, or delivery of, the finished data.
Adjustments between IFRS revenues and Produced Revenues for each quarter in 2022 and 2021 are shown in the table below:
| 2021 | 2022 | |||||||
| $ Million | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 |
| MultiClient pre-funding revenues, IFRS | 80 | 63 | 45 | 60 | 15 | 96 | 19 | 9 |
| Less Revenue for projects with IFRS performance obligations met during the quarter for completed projects | 80 | 63 | 45 | 60 | 15 | 96 | 19 | 9 |
| Add Revenue recognized on a POC basis during the quarter | 46 | 29 | 35 | 24 | 19 | 33 | 37 | 43 |
| Produced MultiClient Pre-funding Revenues | 46 | 29 | 35 | 24 | 19 | 33 | 37 | 43 |
**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.
| FOR DETAILS, CONTACT: |
| Bård Stenberg, VP IR & Corporate Communication Mobile: +47 99 24 52 35 |
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PGS ASA and its subsidiaries (“PGS” or “the Company”) is an integrated marine geophysics company, which operates world-wide. The Company supports the energy industry, including oil and gas, offshore renewables, carbon capture and storage. PGS’ headquarter is in Oslo, Norway and the PGS share is listed on the Oslo stock exchange (OSE: PGS). For more information about PGS visit www.pgs.com.
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The information included herein contains certain forward-looking statements that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties. The Company is subject to a large number of risk factors including but not limited to the demand for seismic services, the demand for data from our multi-client data library, the attractiveness of our technology, unpredictable changes in governmental regulations affecting our markets and extreme weather conditions. For a further description of other relevant risk factors we refer to our Annual Report for 2021. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in the information given above about current status of the Company or its business. Any reliance on the information above is at the risk of the reader, and PGS disclaims any and all liability in this respect.
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act
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