MultiClient Library High Channel Count Crews Competitive Advantage Strong HSE Performance
Revenues in USD million
Adjusted eBitdA in USD million
Onshore performed better in 2008 than in the previous year. North and South America are currently the business unit's most active regions.
PGS business unit Onshore has a strong position in the market. Quality, technology, experience, efficiency and crew availability are important factors for securing market share. HSE per- formance is also a crucial differentia- tor and Onshore has an excellent HSE record with an industry leading HSE management system. PGS' business unit Onshore is confident that it can remain competitive by capitalizing on its project execution and management skills and by continuing to provide a high-quality technical solution. Operational efficiency gives Onshore one of the highest average revenues per crew among the top five major international onshore companies. Onshore's homogeneous recording equipment pool facilitates changing crew channel-counts on any specific project, as the market dictates.
The onshore market is very com- petitive as a result of the relatively low barriers to entry and fluctuating demand.The markets in North and South America have been impacted to a lesser degree than the Eastern Hemisphere by this pressure during
2008. Onshore experienced a growing reactivation in the Latin American market during 2008, which is expected to continue in 2009.
2008 HSe Performance Onshore operations recorded a Lost Time Incidents Frequency (LTIF) of 0.08 incidents per million man hours and aTotal Recordable Case Frequen- cy (TRCF) of 1.73 incidents per million man hours during the year, compared to a LTIF andTRCF of 0.58 and 2.67, respectively, in 2007.
2008 operational Performance Onshore revenues for 2008 increased 11% to USD 273.1 million compared to 2007. Operating profit for 2008 in- creased to USD 11.8 million. Improved financial performance is primarily at- tributable to increased activity in Latin America, better crew continuity and lower amortization rates.
At December 31, 2008, the order book for Onshore was USD 194 million, compared to USD 144 million at December 31, 2007.
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tRAnSition zone oPeRAtionS
A map of data acquisition in many oil and gas producing countries will reveal a scarcity of data along the coastal belt even though producing basins often span this divide. Data acquisition in thisTransition Zone (TZ) – the near coastal shallow water environment – is both technically difficult and relatively expensive.This area can also be of an environmentally sensitive nature, requiring strong planning and the right equipment so as to minimize impact. As oil companies seek new reserves and a full un- derstanding of the geological environment, TZ data acquisition has become increas- ingly important.
PGS business unit Onshore has worldwide experience of acquiringTZ data from the north slope of Alaska to the west coast of Africa and from the Gulf of Mexico to South East Asia.This experience is being enhanced with developments in new technology to provide PGS' customers with a varied and
Core operating Regions PGS business unit Onshore conducts onshore, shallow water and transition zone seismic acquisition worldwide. The three core regions are North America, Latin America, and the East- ern Hemisphere.
Onshore has experienced increased activity in the Latin American region with operations in Peru, Brazil and Mexico, including the award of a large multi-year contract in Mexico by PEMEX.The survey will be carried out from 2008 to 2012 and the area to be surveyed is in excess of 2,000 square kilometers. Successful operational history provides confidence for further expansion in both Mexico and other parts of Latin America.
In 2008 Onshore operated up to 12 crews, 6 of which were located in the North American region. Of these six crews, one was conducting transi- tion zone operations and one to two have been dedicated to MultiClient work in the US. In 2007, PGS Onshore increased its MultiClient investments significantly. MultiClient investments have decreased slightly throughout 2008, but are still at historical high levels.
onshore multiClient library The Onshore MultiClient data library consists of high quality surveys cover- ing some of the most active oil and gas provinces in the United States. 2008 saw continued growth in the MultiClient segment of the Onshore business, as demonstrated by sus- tained year-on-year investment levels. In 2008 PGS acquired its 15th survey
flexible solution to their data acquisition challenges.
At present, PGS operates one of the industry's largest (9,000 channel) radio-ba- sed acquisition crews which are ideally sui- ted for data acquisition in environmentally sensitiveTZ areas.The absence of telemetry by cable, facilitates flexible deployment of recording sensors in varied terrain and the avoidance of any impact on areas required to be excluded for environmental reasons. This operating experience with high chan- nel count systems is recognized by the developers and manufacturers of the next generation of cableless systems who are in active collaboration with PGS.
Onshore also operate a traditional cable recording system forTZ operations with proprietary equipment design modificati- ons which provides a seamless acquisition capability with Onshore's HD3D® land
in the Wichita Mountain Front region of Oklahoma bringing total coverage to over 2,600 square miles. Onshore also acquired, and released, two new surveys in the Deep Bossier gas play in EastTexas.These surveys totaled 580 square miles and brought total coverage in the trend to just below 1,000 square miles. Onshore Multi- Client sales decreased as a result of extensive cuts in capital expenditures among clients during the last quarter of 2008. Onshore expects a temporary slowdown in MultiClient investment activity for 2009. However, in the long run the Company expects solid returns on MultiClient investments.
Competitive Advantage At year-end 2008 Onshore owned and operated approximately 86,000 chan- nels.The business unit has focused on the high density 3D (HD3D®) part of the market and has, therefore, increased channel count per crew, resulting in 50% increase in aver- age channel count per crew over the last four years. Onshore offers both traditional 3D and HD3D® seismic acquisition.
The homogeneous state-of-the-art asset base is continually being modernized and new technologies are adopted. Onshore is evaluat- ing and testing available cableless recording systems as well as pursuing the development of land and shallow water energy sources.These are clear differentiators which will improve operations.The high channel-count crews and modern equipment, coupled with experienced technical staff, secures, for PGS clients, optimal
acquisition systems.To complement the recording equipment, PGS has developed a crew configuration of specialized deploy- ment boats and innovative seismic source options.The crew is designed for disassem- bly and shipping in standard containerized form, facilitating mobilization anywhere in the world, providing PGS with access to varied and wide spread areas of operation and the ability to take advantage of market opportunities worldwide.
Transition Zone acquisition capabilities will continue to be a focus for innovation, development and market opportunity, complementing PGS' Marine and Onshore operations.
survey designs, high efficiency and the best data quality.
Onshore has demonstrated market- leading seismic service performance, operating seismic crews in a variety of terrain types, including desert, arctic, jungle, swamp, highland and moun- taintop and transition zones.
Proactive social and environmental development programs have created another important competitive ad- vantage. Onshore works to establish strong relationships and communica- tions with the local population in the areas it is operating and strives to ensure that , wherever possible, em- ployment and benefit go to the people in the area. Onshore also sponsors educational programs, among other efforts, to promote social develop- ment.
Goals and Strategies Onshore will continue its focused market approach and financial disci- pline going forward.The business unit will use its operational expertise and standardized equipment to deliver sound financial performance in a challenging market. Onshore intends to continue its social responsibility programs and the efforts to promote HD3D® in the onshore market.
outlook 2009 PGS Onshore expects financial results to be weaker than in the two previous years, due to a more challenging market environment. As a part of the Company's cost reduction program capital expenditures will be reduced.
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