PGS (Hold, TP: NOK10.50) - A MultiClient-tilted quarter
Our Q3 revenue estimate is in line with consensus of USD213m (Q3 revenue update due 10 October around 08:00 CET). We expect strong vessel utilisation (88%) in the quarter, with capacity predominantly tilted towards MultiClient work. However, such a high tilt towards MultiClient is generally not favourable for near-term cash flow, and along with significantly higher interest costs QOQ, we estimate USD46m in negative FCF for Q3. We reiterate our HOLD and NOK10.5 target price, based on the proposed merger exchange ratio with TGS.Petroleum Geo-Services is engaged in providing geophysical services and oil and gas production services. As of Dec. 31, 2001, Co. operated six Ramform design vessels in its marine seismic data acquisition operations.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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