Annual Report 2011 - PGS

Letter from the CEO
GeoStreamer technology. Ramform Viking and
PGS Apollo were equipped with GeoStreamer
in 2011 and by year-end nearly 60 percent of our
streamer capacity was GeoStreamer.
Technology Leadership
Technology plays an increasingly important
role in supplier differentiation and building
our competitive advantage. GeoStreamer
is the best example of PGS’ technology
differentiation. At its launch in June 2007,
it was heralded as the most significant
breakthrough in streamer technology in 60
years. GeoStreamer is the first-ever dual-sensor
streamer, yielding greater imaging on deeper
targets, enhanced resolution and improved
operational efficiency.
In 2011, we enhanced GeoStreamer technology
with the introduction of GeoSource (GS).
GeoStreamer in combination with GeoSource
comprise our GeoStreamer GS technology,
the only ghost-free acquisition solution in the
industry. GeoStreamer GS improves bandwidth
beyond the capabilities of the GeoStreamer
and delivers unrivaled image resolution.
GeoStreamer GS is unique in its ability to
generate sharper, more precise imaging of
complex targets located at great depths or
beneath salt, basalt, and other challenging
geological structures. PGS aims to equip all
GeoStreamer vessels with GeoStreamer GS
technology by year-end 2012.
Our next products in the technology pipeline
are the OptoSeis fiber-optic solution for
permanent monitoring and towed Electro
Magnetic (towed EM) acquisition. We are
moving ahead with our fiber-optic deployment
breakthrough, the agreement signed with
Petrobras in 2010 for a seabed-installed fiberoptic
monitoring system at the deepwater
Jubarte field offshore Brazil. The system will be
installed mid 2012. We are planning to run the
first commercial towed EM survey in 2012. Our
ultimate goal is to acquire seismic and EM data
simultaneously.
Financial Strength
Building on our strategy of having a
conservative balance sheet, PGS has
maintained its ability to invest in technology,
MultiClient library, and capacity expansion
despite a challenging market. We extended the
Company’s debt maturity, from approximately
three years in early 2011 to approximately four
years by year-end. Issuance of a $300 million
Senior Notes due in 2018 and amendment of
our revolving credit facility were the two most
significant achievements. The Senior Notes
offering was well received in the market and
priced at favorable terms.
Our strategy has and will continue to be
to deliver return to shareholders over the
business cycle. To demonstrate the earnings
capability of PGS the Board of Directors
propose to the Annual General Meeting in 2012
a dividend for the full year 2011 of NOK 1.10 per
share, in line with earlier announcements. We
have a dividend policy aimed at distributing 25-
50 percent of net income to shareholders over
the business cycle.
Health, safety, environment, and quality —
HSEQ — remains a key priority for PGS. Our
ambition is to operate in a manner that does
not cause harm to people or the environment.
Total Recordable Case Frequency (TRCF) was
1.44 per million man-hours in 2011 compared
with 1.94 per million man-hours in 2010. The
Lost Time Incident Frequency (LTIF) for 2011
was 0.93 per million man-hours compared with
0.59 per million man-hours in 2010. We work
proactively to reduce employees’ exposure to
risk. In 2011, the Company received OHSAS
18001 certification, with Det Norske Veritas
(DNV) as the certifying body. OHSAS 18001
is an internationally recognized standard
that defines requirements for management
systems covering occupational health and
safety. Certification brings us one step closer
to our goal of becoming one of the best in our
industry on HSEQ performance.
Outlook
We have achieved higher prices for marine
contract work for the 2012 North Atlantic
season. Market activity has increased
significantly for work in the second and third
quarter 2012 driven by increased interest
for Baffin Bay, Greenland and the Barents
Sea. Activity in the Gulf of Mexico combined
with incremental demand offshore Angola
10 PGS Annual Report 2011