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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the Month of November 2000
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PETROLEUM GEO-SERVICES ASA
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(Translation of registrant's name into English)
Strandveien 50E
P.O. Box 89
N-1325 Lysaker
Norway
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(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.]
Form 20-F X Form 40-F
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[Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.]
Yes No X
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THIS REPORT ON FORM 6-K IS HEREBY INCORPORATED BY REFERENCE IN
THE REGISTRATION STATEMENT OF PETROLEUM GEO-SERVICES ASA ON FORM S-8 (SEC
REGISTRATION NO. 333-6420) AND IN THE PROSPECTUSES CONSTITUTING PART OF THE
REGISTRATION STATEMENTS OF PETROLEUM GEO-SERVICES ASA ON FORM F-3 (SEC
REGISTRATION NOS. 333-90379, 333-9518 AND 333-9520) AND PART OF THE REGISTRATION
STATEMENT OF PETROLEUM GEO-SERVICES ASA ON FORM F-4 (REGISTRATION NO. 333-9702).
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[PGS LOGO]
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FOR DETAILS, CONTACT: FOR IMMEDIATE RELEASE
J. CHRIS BOSWELL, SVP & CFO October 25, 2000
SAM R. MORROW, SVP Finance & Treasurer
ERIK HOKHOLT, Director Financial Planning & European IR
Phone: +44 1224 247 000 (Management will be available at this
number through 10/25/00. After 10/25/00, please call 281-589-7935.)
PETROLEUM GEO-SERVICES ANNOUNCES
THIRD QUARTER 2000 RESULTS
FINANCIAL HIGHLIGHTS
o Third quarter revenue increases by 4% over the 2000 second quarter
o Third quarter diluted earnings per share were $0.17, an increase of 21%
over the 2000 second quarter
o Production services revenue totals $124.8 million, 51% of total revenue,
for the third quarter
o Third quarter multi-client sales were $62.2 million
o PGS announces intention to register its shares in Spinnaker Exploration
Company as part of its previously stated plans to divest of non-core
assets and reduce debt
OPERATING HIGHLIGHTS
o PGS is awarded a 10,000 square kilometer exclusive multi-client 3D
contract in deepwater Brunei that will utilize the largest streamer
spread ever deployed in the Asia Pacific region
o PGS is awarded a contract to acquire 2,088 square kilometers of
multi-client 3D data in Pakistan, with work expected to commence in the
fourth quarter of 2000
o PGS is awarded a contract to establish a data bank for Pertamina in
Indonesia utilizing its proprietary PetroBank(TM) data management
platform
o PGS' Ramform Banff mobilizes to shipyard for modifications to improve
vessel roll motions and thereby improve uptime performance
HOUSTON, TEXAS; OSLO, NORWAY; OCTOBER 25, 2000:-- Petroleum
Geo-Services ASA (NYSE: PGO; OSE: PGS) reported today 2000 third quarter revenue
of $246.9 million, an increase of 12% over the same period of the previous year.
Third quarter operating profit was $50.4 million, representing a 20%
operating profit margin versus a 21% operating profit margin (before unusual
items) for the 1999 third quarter.
Net income for the third quarter of 2000 was $17.3 million, versus
$21.8 million (before unusual items) for the 1999 third quarter. Diluted
earnings per share were $0.17 compared to diluted earnings per share (before
unusual items) of $0.22 for the same period of 1999.
Reidar Michaelsen, Chairman of the Board and Chief Executive Officer,
stated, "Oil and gas prices remain high due to tight supplies resulting from
favorable global economic growth and limited excess productive capacity.
Consequently, oil and gas companies have started increasing exploration
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and production spending due to the critical need to develop new reserves and
enhance production from existing reservoirs. We expect to continue expanding our
production and geophysical services businesses through deployment of our
production expertise and our advanced geophysical technology. Specifically,
geophysical products such as our PetroTrac(TM) suite of advanced reservoir
technologies and our extensive inventory of multi-client 3D data covering some
of the most prospective regions in the world should position PGS to capture a
growing share of this higher spending."
Michaelsen went on to say, "As announced earlier today, we intend to
register our shares in Spinnaker Exploration Company as part of our previously
disclosed plans to divest of non-core assets and reduce debt. This registration
will give PGS the flexibility to dispose of its shares in an orderly fashion
over the next 24 months."
REVIEW OF GEOPHYSICAL SERVICES OPERATIONS
For the quarter ended September 30, 2000, the Company achieved total
geophysical services revenue of $122.1 million, an increase of 10% over the same
period of 1999, yielding an operating profit of $16.3 million. Multi-client
sales revenue for the period totaled $62.2 million. The average amortization
rate applied to multi-client sales during the third quarter was 57%.
The increase in geophysical services revenue primarily reflects
improved pricing levels in the contract segment of the market. While we have
allocated more vessels to this market segment, demand for our multi-client 3D
data has remained steady. High oil and gas prices have resulted in record
earnings for many oil and gas companies, which has translated into growing
exploration and production spending. This increased spending is expected to be
focused on enhancing production from existing reservoirs through application of
reservoir-focused technologies such as our PetroTrac(TM) suite of advanced
seismic tools, and on exploration and development in the highly prospective
regions of Brazil, mid-Norway, deepwater Gulf of Mexico and West Africa; areas
where PGS maintains a sizeable multi-client database.
During the third quarter, we continued to acquire data under our
Brazilian multi-client programs. Offshore Brazil remains one of the most
prospective regions in the world and major oil and gas companies have shown a
high level of commitment to this area, leading to excellent interest in this
data. Additionally, the future award of exploration and development licenses by
host countries in regions such as West Africa and Asia Pacific should result in
additional revenue from uplift fees due under previously executed multi-client
sales contracts, as well as generate new interest in our multi-client data in
those regions.
REVIEW OF PRODUCTION SERVICES OPERATIONS
For the quarter ended September 30, 2000, the Company achieved
production services revenue of $124.8 million, a 15% increase as compared to the
same period of the prior year, yielding an operating profit of $34.1 million.
The higher revenue can be attributed to the Petrojarl Varg, acquired in July
1999; the Petrojarl Foinaven, due to higher production volumes during the
period; the Petrojarl I, as a result of production under the Kyle early
production contract; and increased activity at Atlantic Power, our platform
services division. These increases were partially offset by lower revenue from
the Ramform Banff resulting from the implementation of the vessel improvement
plan.
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During the third quarter, the Petrojarl I continued early well test
production on the Kyle field. Production under this contract is expected to
continue into November 2000. The Petrojarl I remains scheduled to begin
production of Statoil's Glitne field in the Norwegian sector of the North Sea in
mid-2001 for a duration of between twenty-six and thirty months, with the first
eighteen months non-cancelable. The Glitne contract will require an upgrade of
the process capability of the Petrojarl I, the timing of which will depend upon
the ultimate duration of the Kyle early production contract and other potential
short term North Sea work. This upgrade is expected to enhance the value and
utility of the vessel, and we expect a significant portion of the cost to be
recouped via the Glitne contract. With respect to the Ramform Banff, the vessel
departed the field during October for a shipyard in Germany, where a planned
upgrade will significantly reduce vessel roll motions, thereby improving uptime
performance. The upgrade, which has the support of the U.K. Health and Safety
Executive and the Banff oil field partners, will require a short yard stay,
after which the vessel is expected to be back in operation by year-end. No
compensation will be required from PGS while production from the Banff field is
temporarily suspended during the upgrade period.
On a matter related to the Banff field development, the Company has
reached a settlement resolving outstanding litigation with DSND Subsea Ltd., a
company that was contracted to perform certain subsea services for the Banff
field development during 1998. The settlement includes all aspects of the
contract that were disputed. The final settlement cost will be reflected as part
of the cost of the Banff field development and will not have a material impact
on the Company's financial position or results from operations.
* * * * * * * * * * * * * * * * * * * *
Petroleum Geo-Services' third quarter earnings conference call is
scheduled for October 25, 2000 at 9:30 a.m. EDT. Interested parties may listen
to the call via Petroleum Geo-Services' web site at www.pgs.com. PGS suggests
that you connect with the site at least fifteen minutes prior to the call to
ensure adequate time for any software download that may be needed to hear the
call. There will be a digital replay of the conference call beginning at 11:00
a.m. EDT on the day of the call through Wednesday, November 1, 2000 at
888-566-0439 or 402-998-0607 for international callers (Passcode: PGS).
* * * * * * * * * * * * * * * * * * * *
Petroleum Geo-Services is a technologically-focused oilfield service
company principally involved in two businesses: geophysical seismic services and
production services. PGS acquires, processes, manages and markets 3D, time-lapse
and multi-component seismic data and provides associated data management
solutions. This data is used by oil and gas companies in the exploration for new
reserves, the development of existing reservoirs, and the management of
producing oil and gas fields. PGS' PetroTrac(TM) suite of advanced geophysical
technologies allows oil and gas companies to better characterize and monitor
their reservoirs in order to enhance production and ultimate recovery of
hydrocarbons. In its production services business, PGS owns four floating
production, storage and offloading systems and operates numerous offshore
production facilities for oil and gas companies. FPSOs permit oil and gas
companies to produce from offshore fields more cost effectively. PGS operates on
a worldwide basis with headquarters in Oslo, Norway and Houston, Texas.
* * * * * * * * * * * * * * * * * * * *
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The information included herein contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements are based
on certain assumptions and analyses made by the Company in light of its
experience and its perception of historical and future trends, on general
economic and business conditions and on numerous other factors, including
expected future developments, many of which are beyond the control of the
Company. Such forward-looking statements are also subject to certain risks and
uncertainties as disclosed by the Company in its filings with the Securities and
Exchange Commission. As a result of these factors, the Company's actual results
may differ materially from those indicated in, or implied by, such
forward-looking statements.
- FINANCIAL TABLES TO FOLLOW -
TO ACCESS MORE INFORMATION, VISIT OUR WEB SITE: WWW.PGS.COM
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Petroleum Geo-Services ASA
Consolidated Income Statements(1)
<TABLE>
<CAPTION>
Quarter ended Nine months ended Year ended
September 30, September 30, December 31,
---------------------------- -------------------------- ------------
(In thousands of dollars, except for share data) 2000 1999 2000 1999 1999
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUE $ 246,880 $ 219,470 $ 695,999 $ 567,470 $ 788,160
------------ ------------ ------------ ------------ ------------
Cost of sales 109,605 89,387 317,060 230,815 333,060
Depreciation and amortization 65,755 62,951 195,441 170,293 238,576
Research and technology costs 1,465 2,543 6,736 13,612 15,859
Selling, general and administrative costs 19,695 17,820 57,203 52,817 71,738
Unusual items, net(2) -- 21,866 -- 89,855 89,855
------------ ------------ ------------ ------------ ------------
Total operating expenses 196,520 194,567 576,440 557,392 749,088
------------ ------------ ------------ ------------ ------------
Operating profit 50,360 24,903 119,559 10,078 39,072
Financial expense, net(3) (36,896) (26,179) (100,090) (67,063) (95,969)
Other income, net(4) 2,902 (3,732) 8,074 16,753 18,715
------------ ------------ ------------ ------------ ------------
Income (loss) before income taxes and cumulative
effect of accounting change 16,366 (5,008) 27,543 (40,232) (38,182)
Provision (benefit) for income taxes(5) (946) (25,110) (10,704) (37,738) (41,890)
------------ ------------ ------------ ------------ ------------
Income (loss) before cumulative effect
of accounting change 17,312 20,102 38,247 (2,494) 3,708
Cumulative effect of accounting change, net(6) -- -- -- (19,977) (19,977)
------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 17,312 $ 20,102 $ 38,247 $ (22,471) $ (16,269)
============ ============ ============ ============ ============
Basic earnings (loss) per share before cumulative effect
of accounting change $ 0.17 $ 0.21 $ 0.38 $ (0.03) $ 0.04
Cumulative effect of accounting change, net(6) -- -- -- (0.21) (0.21)
------------ ------------ ------------ ------------ ------------
Basic earnings (loss) per share $ 0.17 $ 0.21 $ 0.38 $ (0.24) $ (0.17)
============ ============ ============ ============ ============
Diluted earnings (loss) per share before cumulative effect
of accounting change $ 0.17 $ 0.20 $ 0.37 $ (0.03) $ 0.04
Cumulative effect of accounting change, net(6) -- -- -- (0.21) (0.21)
------------ ------------ ------------ ------------ ------------
DILUTED EARNINGS (LOSS) PER SHARE(7) $ 0.17 $ 0.20 $ 0.37 $ (0.24) $ (0.17)
============ ============ ============ ============ ============
Basic shares outstanding 102,208,350 97,948,880 101,909,481 92,499,346 94,767,967
------------ ------------ ------------ ------------ ------------
Diluted shares outstanding 104,023,809 99,678,053 103,381,447 92,499,346 95,840,199
============ ============ ============ ============ ============
</TABLE>
NOTES:
(1) Certain reclassifications have been made to conform prior year amounts with
the current year presentation.
(2) Unusual items, net for the year ended December 31, 1999 includes $74.0
million (of which $21.9 million was incurred in the third quarter of 1999)
in employee termination costs, lease termination/revision costs, vessel
derigging costs and equipment impairments directly related to restructured
operations, as well as $15.9 million in asset impairments necessitated by
market conditions.
(3) For information regarding $143.8 million liquidation amount of 9.625% trust
preferred securities issued by PGS Trust I, a statutory business trust
formed by the Company, see Note 9 in the Notes to Consolidated Financial
Statements contained in the Company's Annual Report on Form 20-F for the
fiscal year ended December 31, 1999. Financial expense, net for the third
quarter and nine months ended September 30, 2000, and the year ended
December 31, 1999, includes $3.7 million, $11.1 million and $7.7 million,
respectively, in minority interest expense related to the trust's
securities. The sole assets of the trust are junior subordinated debentures
of the Company that bear interest at the rate of 9.625% per year and mature
on June 30, 2039. As of June 30, 2000, the trust held $148.2 million
principal amount of such debentures.
(4) Other income, net for 1999 includes $19.1 million in UK lease gains related
to the Ramform Victory and the Ramform Vanguard which were delivered in
January and April of 1999, respectively.
(5) Provision (benefit) for income taxes for 1999 includes $15.3 million in
gains related to the resolution of certain tax issues during the third
quarter of 1999.
(6) Effective January 1, 1999, the Company adopted Statement of Position (SOP)
98-5, "Reporting on the Costs of Start-up Activities." This SOP requires
that the initial, one-time costs related to introducing new products and
services, conducting business in new territories or commencing new
operations be expensed as incurred. Accordingly, the Company has recognized
a charge to income of $28.0 million ($20 million net of tax) as the
cumulative effect of the change in accounting principle.
(7) Diluted earnings per share before unusual items and gains related to the
resolution of certain tax issues for the third quarter of 1999 were $0.22.
