TGS optimistic despite cancellation, market uncertainty

TGS says a five-year charter for its 2D vessel M/V Northern Genesis has been terminated early.

Offshore staff

ASKER, Norway -- TGS says a five-year charter for its 2D vessel M/V Northern Genesis has been terminated early. The charter had been due to expire in March 2012.

Under current market conditions, TGS points out, clients are benefiting from greater 2D vessel availability, resulting in significantly lower operating costs per unit of seismic data acquired

Recent events have further dampened TGS’ short-term expectations. In Norway, the announcement of Norway’s 21st licensing round was delayed until June 23 – this impacted the company’s second-quarter sales for its updated 2D and 3D Norwegian Continental Shelf data library.

Also, uncertainty over activity in the deepwater Gulf of Mexico caused sales decisions on several large data quotes to be delayed.

Offshore West Africa, however, activity is increasing as E&P companies look for new opportunities in frontier and established plays.

Based on current and forecast activity, TGS still expects to achieve its target net revenue this year of $560-600 million.

07/08/2010

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