TGS ASA

Q2 revenue was $400 million, up 30% year over year from $308 million. EBITDA was $244 million versus $153 million a year ago, a 61% margin, and EBIT was $120 million versus a loss of $22 million a year ago, a 30% margin. Multi-client revenues were $250 million and multi-client investments were $168 million; marine data acquisition total revenues were $240 million and imaging total revenues were $32 million. Net debt ended Q2 at $503 million, or just above $400 million pro forma after the North American well data sale. Management reiterated full-year guidance of about $550 million of multi-client investments, gross operating expenses around the annualized $950 million run rate, and said it expects to be within the $250 million to $350 million net debt range toward year-end.

Kristian Johansen struck an upbeat tone, saying the quarter confirmed TGS’s integrated model, especially the ability to shift capacity between multi-client and contract work. He highlighted strong order inflow, record utilization, and a backlog that positions the company well for future growth. Strategically, he emphasized offshore focus, technology upgrades through the Apparition acquisition, and the North American well data divestiture as steps to sharpen the portfolio and accelerate shareholder distributions.

Sven Larsen emphasized the operating leverage in the quarter: $400 million of revenue, $244 million of EBITDA, and $120 million of EBIT. He noted that gross operating expenses were $267 million in Q2, above the original annualized guidance path because of higher activity, a different geographic mix, and higher fuel costs, but said the second half should move back toward the $950 million annualized run rate. Cash flow was negative in Q2, with $78 million of working-capital drag, $148 million of multi-client investment outflows, and total net cash flow of negative $56 million, but he expects much stronger second-half cash generation and net debt to move into the $250 million to $350 million target range.

Analysts asked about winter vessel utilization, late sales, prefunding for Brazil, the link between acreage awards and seismic demand, pricing in contract work, and which new multi-client projects will support second-half sales. Management said utilization is expected to stay strong, though winter is always tougher and they are still signing backlog for that period; late sales were stronger than expected; and the delayed Brazil prefunding commitment was closed in Q2, with cash expected in early Q3. On pricing, Kristian Johansen said streamer contract pricing is fairly flat and not great, with some competitors underpricing by 15% to 20%, while also noting that direct government awards mean customers often buy less seismic before acreage awards than in the past.