EMGS – Vessel update and activity for the third quarter 2018

EMGS – Vessel update and activity for the third quarter 2018

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 third quarter 2018 was 29% compared with 77% for the third quarter in 2017.

In the third quarter of 2018, the Company’s vessels were allocated 29% to multi-client projects and no time was spent on proprietary work. In the comparable quarter of 2017, the vessel was allocated 72% to multi-client projects and 5% to a funded research and development project.

EMGS had two vessels in operation and recorded 6.0 vessel months in the quarter. In the third quarter 2017, the Company recorded 3.0 vessel months.

Vessel activity
The Atlantic Guardian acquired data on multi-client surveys in the North Sea in the beginning of the quarter, after which she acquired data on a multi-client survey in the Norwegian Sea until 16 September 2018.

The Atlantic Guardian’s utilisation for the third quarter was 59%.

The BOA Thalassa has been idle this quarter.

Multi-client revenues in the third 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 concluded. The interpretation of the new standard is the same as last quarter. The 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 5 million in multi-client revenues for the third 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 third quarter 2018 would have totaled approximately USD 2 million.

The difference in revenues are timing differences only and does not have any effect on cashflow.

EMGS will publish its third quarter 2018 financial results on Thursday 1 November 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