TGS slashes spending

Seismic survey ship charterer sees investment falling by more than 50% this year.

Seismic survey player TGS-Nopec is forecasting a fall in its investments by more than 50% this year.

Multi-client spending will drop to $220m in 2016 as a result of substantially lower charter rates and reduced activity by oil companies, it said.

The Oslo-listed vessel charterer last month announced it was booking a $150m impairment on its survey book, and looking to shed 130 jobs.

On Thursday, it said fourth quarter revenues were likely to have dropped to $131m, down 56% year-on-year. The full-year figure will be down 33% at $612m.

The 2015 investment spend was $497m. It has $162m of cash available.

"The weak market conditions are expected to continue in 2016. Consequently, TGS is planning for a lower activity level," it said.

CEO Robert Hobbs added: "However, the significant reduction in investments combined with the effect from the cost-cutting measures implemented last year should support positive cash flow development despite the challenging environment."

TGS logged net earnings in the three months to 30 September of $40.1m against $54.7m in 2014. Revenue was cut to $169.5m from $190.1m over the same period.