Annual Report 2011 - PGS

Board of Directors’ report
sharing agreements between Sonangol and the
oil companies were completed, which allowed
work to begin on the awarded blocks. Seismic
acquisition began in late 2011 and will be
ramped up in 2012.
Civil unrest in Egypt and Libya slowed down,
and in some cases halted, seismic activities
in the Mediterranean in early 2011. The shortterm
effects on our business were negative.
The Mediterranean is a region with significant
upside potential due to below-average survey
activity over the last couple of years and
expectations that the region may regain its
former importance for oil companies.
The marine contract market is improving.
Incremental demand offshore Angola, the Gulf
of Mexico and increased interest for Baffin Bay,
Greenland and the Barents Sea is expected
to improve the supply/demand balance in the
seismic market. We have achieved higher prices
and margins for awarded marine contract work
so far for the 2012 North Atlantic season as
compared to 2011 and we expect a tighter North
Atlantic market to have spill over effects to
other regions.
Considering the high oil price levels, the
reserve replacement ratio for the oil industry
and the forecasted decline in oil reserves,
we expect demand fundamentals for seismic
services to be strong longer term as well.
We have a competitive advantage in our
cost-efficient and uniform fleet, which will be
enhanced further when we take delivery of two
Ramform Titan-class vessels. Going forward,
this advantage will be increasingly important
for us in order to maintain industry-leading
margins and generate robust cash flows
through the cycles.
expect our revenues and EBITDA to increase in
2012.
The Board emphasizes that forward looking
statements contained in this report are based
on various assumptions made by management,
depend on factors beyond our control, and
are subject to certain risks and uncertainties.
Accordingly, actual results may differ materially
from those contained in forward looking
statements.
Pursuant to §3-3a of the Norwegian accounting
act, the Board confirms that the 2011 financial
statements have been prepared based on the
assumption of a going concern and that it
believes that this assumption is appropriate.
Allocation of the Parent Company’s Gain for
2011
The financial statements of the parent
company, Petroleum Geo-Services ASA
(PGS ASA), are prepared and presented in
accordance with generally accepted accounting
principles in Norway (N GAAP). PGS ASA
reported a net income of NOK 638.1 million
for 2011, compared to a net loss of NOK 515.6
million in 2010. PGS ASA is a holding company
with no material operating activities. The
positive net income for 2011 is primarily caused
by dividends from subsidiaries.
Of the total 2011 net income of NOK
638,061,000, the Board proposes to allocate
NOK 398,481,000 to other equity and NOK
239,580,000 as dividend to shareholders.
Total shareholders’ equity in PGS ASA as of
December 31, 2011 was NOK 10,281,274,000,
corresponding to 49 percent of total assets.
Other equity as of December 31, 2011 was NOK
7,311,756,000 of which NOK 6,505,306,000 was
unrestricted equity.
We enter 2012 with an order book for our 3D
fleet averaging approximately six months. We
London, March 22, 2012
Board of Directors
Petroleum Geo-Services ASA
Francis Gugen
Chairperson
Harald Norvik
Vice Chairperson
Carol Bell
Holly Van Deursen
Annette Malm Justad Daniel J. Piette Ingar Skaug Jon Erik Reinhardsen
Chief Executive Officer
PGS Annual Report 2011 65