Electromagnetic Geoservices ASA (the “Company” or “EMGS”) releases information on vessel activity and utilisation 4-5 working days after the close of each quarter. The Company defines vessel utilisation as the percentage of the vessel charter period spent on proprietary or multi-client data acquisition. Downtime (technical or maritime), mobilisation, steaming, and some standby activities are not included in the utilisation rate.
Vessel utilisation for the first quarter 2018 was 37% compared with 92% for the first quarter in 2017.
In the first quarter of 2018, the Company’s vessels were allocated 37% to multi-client projects and no time was spent on proprietary work. In the comparable quarter of 2017, the vessels were allocated 92% to multi-client projects and no time was spent on proprietary work.
EMGS had two vessels in operation and recorded 6.0 vessel months in the quarter. In the first quarter 2017, the Company also recorded 6.0 vessel months, including 3.0 months where BOA Thalassa was laid up.
The Atlantic Guardian was idle until 20 February 2018, after which she conducted a sea trial of the DeepBlue equipment. Following this, the vessel commenced a multi-client survey in the Barents Sea on 3 March 2018. The multi-client survey will be completed in April 2018.
The vessel’s utilisation for the first quarter was 30%.
The BOA Thalassa acquired data on pre-funded multi-client surveys offshore Indonesia from 1 January 2018 to 11 February 2018. Following that, the vessel returned to Malaysia.
The vessel’s utilisation for the first quarter was 45%.
Multi-client revenues in the first quarter
The new revenue recognition standard, IFRS 15, was effective from 1 January 2018. The new standard’s impact on recognition of multi-client pre-funding revenues has still not been finally concluded. Based on the current interpretation of the new standard within the industry, in which multi-client prefunding revenues are recognised at the point in time final data is delivered to the customer and not based on the so called Percentage of Completion (POC) principle, the Company expects to record approximately USD 1 million in multi-client revenues for the first quarter 2018.
If the Company had used the same revenue recognition principles as in 2017 (i.e. the POC principle), the multi-client revenues for the first quarter 2018 would have totaled approximately USD 3 million.
The difference in revenues are timing differences only and does not have any effect on cashflow.
EMGS will publish its first quarter 2018 financial results on Thursday 3 May 2018 at 07:30 CET. A presentation will be broadcasted live over the Internet, starting at 10:00 CET. To access the presentation, please go to the Company’s homepage (www.emgs.com) and follow the link.
Hege Veiseth, EMGS Chief Financial Officer, +47 992 16 743