PGS Expands its New Energy Portfolio

Ocean Floor Geophysics Inc. (OFG), a company in which PGS owns approximately 43%, has acquired the entire share capital in NCS SubSea.

NCS SubSea owns and operates the P-Cable system. The P-Cable technology provides ultra-high-resolution 3D seismic data to the new energy- and oil & gas markets.

PGS said in a media release that with the addition of the P-Cable technology, OFG would provide the “broadest range of marine geophysical data technology and services in the offshore market. The multiphysics offering includes the widest range of sensor solutions deployed from surface, AUV and ROV platforms, and is combined with unique multiphysics processing, integration and interpretation know-how.

“This transaction enables a further extension of the strategic collaboration between PGS and OFG and a potential consolidation of PGS’ shareholding in OFG up to approximately 55% on a fully diluted basis. PGS will continue to work closely with OFG as a preferred supplier of ultra-high-resolution seismic, Controlled Source Electro Magnetic (CSEM), magnetic and acoustic surveying products and services in energy transition activities like carbon storage, site investigations for offshore windfarms and mapping of seabed minerals for use in electrification.

Berit Osnes, EVP New Energy of PGS, commented: “PGS remains a dedicated and reliable pioneer serving the energy industry with our integrated geophysical data acquisition and processing capabilities. Our strategic collaboration with OFG and their acquisition of NCS SubSea further expands our offering within the New Energy markets. By bringing the ultra-high-resolution P-Cable 3D seismic technology into OFG, we can apply PGS’ inhouse data processing capabilities, expanding our offering for site characterization and shallow geohazard applications.”

“OFG is delighted to add P-Cable to our already extensive range of geophysical products and services,” said OFG CEO Matthew Kowalczyk. “Interest in ultra-high-density 3D seismic is growing apace, driven by rapid growth in the market for offshore wind. We look forward to bringing OFG’s considerable expertise in operation and engineering to the P-Cable system, to further improve robustness and reliability, and extend the operating envelope,”

In other news, PGS has approved changes in the company’s basis for segment reporting. Since 2018, the marine geophysics company has prepared its internal management reporting based on the principles applied prior to the implementation of IFRS 15, Revenue from Customer Contracts.

PGS said this method has recognized MultiClient pre-funding revenue on a percentage of completion basis, and the related amortization of MultiClient library based upon the ratio of aggregate capitalized survey costs to forecasted sales. Maintaining the Segment Reporting on this basis has required maintaining two different sets of accounting records.

Going forward, the company will apply IFRS 15 as measurement basis also for its internal reporting, generally recognizing MultiClient pre-funding revenues at delivery of the final processed data, which is typically later than the acquisition of the seismic data.

Consequently, from and including Q1 2022, PGS will no longer present revenue and amortization for pre-funding contracts on a percentage of completion basis as segment information.

The change is intended to streamline internal processes and simplify external financial reporting aligned with IFRS regulations, and is in line with the company’s focus on reducing turnaround times for MultiClient surveys.

PGS said a similar change has recently been announced by another company in the seismic industry. The company will provide Alternative Performance Measures (APMs) and additional disclosures to enable evaluation of progress for ongoing MultiClient surveys. More information will be provided ahead of the Company’s reporting for Q1 2022.