Oslo-listed seismic surveyor TGS posted a smaller-than-expected increase in fourth-quarter revenues on Jan. 9 and said a recent fall in crude prices created uncertainty around the spending plans of its customers in the oil industry.
The company sells its geological surveys to E&P companies seeking to drill for hydrocarbons, as the data helps them determine the presence of oil and gas in offshore and onshore reservoirs.
Preliminary revenues for the October-December period stood at $188 million, up from $157 million a year ago but lagging an analyst consensus estimate of $204.6 million, according to Refinitiv data.
While oil companies have increased their exploration investments after years of cost cuts, the recent crude price volatility impacted their spending on seismic data in late 2018, and may also impact the coming year, TGS said in a statement.
“With oil prices currently trading below $60 per barrel, there continues to be some uncertainty on 2019 E&P spending, particularly offshore,” Kristian Johansen, TGS CEO, said.
“However, I’m confident that our quality data library and pipeline of new projects position TGS for another successful year,” he added.
On Jan. 7, competitor Petroleum Geo Services reported better-than-expected fourth-quarter sales and earnings numbers, driving its shares sharply higher.
TGS’ shares rose 20% in the last week, closing at 249.8 Norwegian crowns (US$29.36) on Jan. 8.