Electromagnetic Geoservices (EMGS) is to sell one of its three owned vessels and will lose more of its staff to cut costs, in response to “the challenging market conditions in the oil service industry”.
These new measures come in addition to cost-saving measures EMGS announced earlier in the year, “based on the development in revenues so far in 2015, as well as the outlook for the rest of 2015 and 2016”.
In June, the Oslo-listed company said it was aiming for a 50% cut in capital expenditure during 2015, which should reduce operational costs by approximately $35m.
EMGS said today that it would implement a total of $70m in cost reductions during 2015, which would reduce the company’s annual operational costs to below $100m, before restructuring charges of around $2.8m and $4.4m in a provision related to a loss on charter agreements.
“Although the market conditions currently are challenging, EMGS believes that the company’s technology and flexible business model leaves the company well positioned for an upturn in the market,” the company commented today.