Shares in Norway's Seismic Survey Companies Rise After Results

Seismic surveyor group TGS reported stronger than expected third quarter results on Friday and rival PGS struck a new loan deal with its banks, giving a boost to their shares.

Seismic surveyors, which scan the rock below the oceans for oil and gas deposits, have had to reduce costs as oil and gas companies have cut back on exploration to cope with low oil prices.

"The demand for seismic data has continued to weaken during the first nine months of the year and there are few signs that a recovery may be imminent," TGS said.

Analysts say spending on seismic services is among the first things oil companies cut in a weak market, but it is also the sector that recovers quickest.

The current seismic market has probably never been worse, PGS Chief Executive Jon Erik Reinhardsen told Reuters.

"That's why it's important to hold on to the cash," he said.

PGS said it had renegotiated the terms of its loans with banks and in return suspended dividend. It said its cost reduction programme was ahead of plans. It reported earnings before interest, taxes, depreciation and amortisation of $115.3 million, lagging forecasts for $117 million.

The firm also cut its 2015 core profit outlook to $500 million, which is still above the $486 million forecast in a Reuters poll of analysts..

TGS's third-quarter operating profit was $46 million, against expectations for $38 million in a Reuters poll of analysts, but was down 35 percent compared to the same quarter a year ago.

TGS said it planned further cost reductions from the beginning of next year and stuck to its 2015 revenue guidance of $630 million.

"In general the (PGS and TGS) reports are somewhat better than the market had feared," Arctic Securities analyst Christian Yggeseth said.

Shares in both companies traded up around 5 percent by 1000 GMT. PGS is down around 47 percent since June 2014, when the slump in oil prices began, while TGS is down 17 percent.

PGS owns most of its fleet, potentially giving it a cost advantage during upturns, while TGS runs an "asset-light" strategy of renting the vessels it needs.

(Reporting by Henrik Stolen, writing by Stine Jacobsen)