PGS ASA: Fourth Quarter and Preliminary Full Year 2023 Results

Reassuring Late Sales and Attractive Contract Rates

Highlights Q4 2023

• Produced Revenues of $227.3 million, compared to $250.7 million in Q4 2022
• Produced EBITDA of $126.7 million, compared to $145.2 million in Q4 2022
• Produced EBIT (ex. Impairments and other charges, net) of $33.3 million, compared to $57.7 million in Q4 2022
• Revenues and Other Income according to IFRS of $265.1 million, compared to $216.7 million in Q4 2022
• Cash flow from operations of $115.8 million, compared to $86.4 million in Q4 2022
• Cash and cash equivalents of $177.7 million, compared to $363.8 million in Q4 2022
• Gross debt of $778.1 million, compared to $1,051.3 million in Q4 2022
• Commenced large offshore wind site characterization survey in the US
• Shareholders approved the merger plan with TGS with close to 100% support
• After year-end, repaid the Term Loan B and refinanced the Super Senior Loan

"It was reassuring to experience a doubling of Q4 MultiClient late sales, compared to the average of the three first quarters of 2023, which speaks to the value of our well-positioned and geographically diverse MultiClient data library. In Q4 most of our late sales came from Europe and West Africa.   

We worked on highly pre-funded MultiClient projects in Brazil and Malaysia in the quarter, and in addition we recorded significant sales from surveys in the processing phase contributing to a strong pre-funding level of 148% of the capitalized MultiClient cash investment.

Profitability of our contract projects in Q4 were at level with the summer season. We are experiencing lower acquisition activity over the winter season. At the same time the value of contract leads continues to grow. In addition, we see increasing opportunities for new MultiClient programs and anticipate a more robust summer season market.

We successfully entered the offshore wind site characterization market in 2023. In Q4 we took another step by commencing a large contract job offshore the US which will continue to late Q2 2024. The recent announcement of a follow-on project in Europe and a growing opportunity basket for more offshore wind work bodes well for our New Energy business.

For the full year 2023 we benefitted from an improving data acquisition market with a high pre-funding level on our MultiClient projects and increasing profitability for contract work. Despite this, revenues declined compared to 2022 owing to unexpected scheduling and operational challenges, and lower than expected MultiClient late sales.

In September we announced our intention to merge with TGS to establish the premier energy data company and in December shareholders of both companies approved the merger with close to 100% support. The process with the Norwegian and UK competition authorities is ongoing and we expect the legal merger process to close in Q2 2024. The combined company will be a complete, fully integrated service provider uniquely positioned to unlock substantial value for shareholders, customers and employees.”

Rune Olav Pedersen,

President and Chief Executive Officer

Outlook
As the global energy transition evolves, PGS expects energy consumption to continue to increase over the longer term with oil and gas being an important part of the energy mix. Offshore reserves will be vital for future energy supply and supports demand for marine seismic services. The seismic market is improving on the back of increased focus on energy security, several years of low investment in new oil and gas supplies, and attractive oil and gas prices.

Offshore energy investments are expected to continue to increase in 2024. The seismic acquisition market benefits from the higher spending level and a limited supply of seismic vessels. PGS New Energy is expected to benefit from an increasing tendering activity for offshore wind site characterization projects.

PGS expects gross cash costs in 2024 to be consistent with the run rate reported for Q4 2023.

Capital expenditures for 2024 is expected to be approximately $125 million, including capex to expand the offshore wind activities and some 2023 streamer capex delayed into 2024.

The order book amounted to $366 million on December 31, 2023. On September 30, 2023, and December 31, 2022, the order book was $437 million and $416 million, respectively.

A complete version of the Q4 2023 earnings release and presentation can be downloaded from www.newsweb.no or www.pgs.com.

The webcast can be accessed from this link:
https://channel.royalcast.com/landingpage/hegnarmedia/20240215_22/

Webcast YouTube link:
https://youtube.com/live/zwnpPDoUWZQ?feature=share

PGS ASA and its subsidiaries ("PGS” or "the Company”) is an integrated marine geophysics company, which operates on a world-wide basis. PGS business supports the energy industry, including oil and gas, offshore renewables and carbon storage. The Company’s headquarter is in Oslo, Norway and the PGS share is listed on the Oslo stock exchange (OSE: PGS). For more information on 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 2022 and the Q4 2023 earnings release. 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.

Attachments

• Q4 2023 Earnings Release
• Q4 2023 Presentation