TGS Q4 2023 Revenue Update

OSLO, Norway (9 January 2024) - Based on preliminary reporting from operating units, management of TGS ASA ("TGS") expects IFRS revenues for Q4 2023 to be approximately USD 189 million, compared to USD 219 million in Q4 2022.

POC revenues* are expected to be approximately USD 205 million, compared to USD 227 million in Q4 2022.

Proprietary revenues are expected to be USD 88 million, up from USD 60 million in Q4 2022.

POC multi-client revenues are estimated at approximately USD 118 million, down from USD 167 million in Q4 2022, with early sales of USD 59 million, up from USD 31 million in Q4 2022, and late sales of approximately USD 59 million, compared to USD 137 million in Q4 2022.

This results in POC revenues of USD 968 million for the full year of 2023, a growth of 14% compared to pro-forma POC revenues (incl. Magseis) in 2022. POC multi-client revenues are expected to be USD 549 million, up 8% compared to 2022.

The POC contract backlog is estimated at USD 545 million compared to USD 475 million on 30 September 2023 and USD 451 million on 31 December 2022. The cash balance on 31 December 2023 was approximately USD 200 million.

“While we are pleased to deliver an annual revenue growth of 14% in 2023, we are disappointed with late sales in Q4. Delayed licensing rounds, supermajors focusing their exploration spending on drilling and new seismic data acquisition, as well as ongoing M&A processes among some of our key customers, partly explain why we did not see the normal year-end spending in Q4. On a positive note, we saw increased activity from independents, good order inflow and positive momentum in our Acquisition business, which continues to outperform our expectations. Further, the strong development in the Digital Energy Solutions business continued, with more than a doubling of revenues compared to Q4 2022. I’m increasingly optimistic for 2024, based on positive signals from our customers. Our contract backlog going into 2024 is 21% higher than a year earlier and the pipeline of further business opportunities looks promising,” stated Kristian Johansen, CEO of TGS.

“In a market characterized by high volatility in both revenue mix and regional focus, diversification is increasingly important. The PGS transaction, which is expected to close during H1 2024, will ensure that TGS has exposure towards all parts of the energy data market, including streamer, OBN acquisition and products and services for new energy. Finally, the transaction will add geographical diversification and thereby reduce volatility of the multi-client business,” added Kristian Johansen.
TGS will release its Q4 2023 results at approximately CET 07:00 am on 15 February 2024.

*For the purpose of POC revenues, multiclient revenues committed prior to completion of projects are recognized on a percentage of completion ("POC") basis. This differs from IFRS reporting where revenues committed prior to completion are recognized when the customers receive access to the finished data.

Adjustments between preliminary IFRS and Segment revenue numbers for Q4 2023:

Preliminary reported IFRS revenue: USD 189 million
- Revenue recognized from performance obligations met during Q4 for completed projects: USD 43 million
+ Revenue recognized under POC during Q4: USD 59 million
= Preliminary reported POC revenue: USD 205 million

For more information, visit TGS.com (http://www.tgs.com) or contact: 

CFO Sven Børre Larsen
Tel.: [phone]
E-mail: [e-mail]

Company Summary
TGS provides scientific data and intelligence to companies active in the energy sector. In addition to a global, extensive and diverse energy data library, TGS offers specialized services such as Ocean Bottom Node (OBN) data acquisition, advanced processing and analytics alongside cloud-based data applications and solutions. For more information visit TGS online at www.tgs.com.

Forward-Looking Statement
All statements in this press release other than statements of historical fact are forward-looking statements, which are subject to a number of risks, uncertainties and assumptions that are difficult to predict and are based upon assumptions as to future events that may not prove accurate. These factors include volatile market conditions, investment opportunities in new and existing markets, demand for licensing of data within the energy industry, operational challenges, and reliance on a cyclical industry and principal customers. Actual results may differ materially from those expected or projected in the forward-looking statements. TGS undertakes no responsibility or obligation to update or alter forward-looking statements for any reason.