PGS Arbitration Award
October 23, 2023, Oslo, Norway: An
English arbitration tribunal has over the weekend provided a
decision in PGS’s favor regarding a dispute over transfer fees
under several data license agreements.
In 2022, PGS recorded revenues of approximately $30 million of
transfer fees relating to a change of control event under several
data license agreements, where the amount was still not agreed with
the client. Given the inability to timely conclude the
negotiations, PGS initiated two separate arbitration proceedings
under the dispute resolution provisions in the agreements. The
tribunal in the first arbitration proceeding has now issued a
decision in PGS’s favor. The award includes late payment interest
and reasonable legal costs. The amount due to PGS, net of any
revenue share to third parties, is estimated to be approximately
$40 million. The detailed calculation of this amount for each of
the data license agreements is currently being undertaken.
The full and formal text of the decision will be released by the
tribunal in due course and PGS expects the amount to be paid during
Q4 2023 or Q1 2024. The second arbitration proceeding is expected
to conclude during the second half of 2024, unless a settlement
between the parties is reached earlier.
PGS is assessing the accounting consequences of the decision in
the first arbitration proceeding. The decision covers $18 million
of the amounts already recognized as revenues by PGS in 2022. PGS
expects to recognize additional revenues in Q3 2023 of
approximately $15 million, but the amount is still not concluded.
Such revenues would be in addition to the estimated $168 million Q3
2023 revenues reported in the Company’s pre-announcement to the
market October 10, 2023. The company will in addition recognize a
significant amount as interest income.
FOR DETAILS, CONTACT: |
Bård Stenberg, VP IR &
Corporate Communication Mobile: +47 992 45 235 |
***PGS ASA and its subsidiaries (“PGS” or “the
Company”) is a fully integrated marine geophysical company that
provides a broad range of seismic and reservoir services, including
data acquisition, imaging, interpretation, and field evaluation.
Our services are provided to the oil and gas industry, as well as
to the broader and emerging new energy industries, including carbon
storage and offshore wind. The Company operates on a worldwide
basis with headquarters in Oslo, Norway and the PGS share is
listed on the Oslo stock exchange (OSE: PGS). For more information
on PGS visit www.pgs.com.
***
The information included herein contains certain forward-looking
statements that address activities, events or developments that the
Company expects, projects, believes or anticipates will or may
occur in the future. These statements are based on various
assumptions made by the Company, which are beyond its control and
are subject to certain additional risks and uncertainties. The
Company is subject to a large number of risk factors including but
not limited to the demand for seismic services, the demand for data
from our multi-client data library, the attractiveness of our
technology, unpredictable changes in governmental regulations
affecting our markets and extreme weather conditions. For a further
description of other relevant risk factors we refer to our Annual
Report for 2022. As a result of these and other risk factors,
actual events and our actual results may differ materially from
those indicated in or implied by such forward-looking statements.
The reservation is also made that inaccuracies or mistakes may
occur in the information given above about current status of the
Company or its business. Any reliance on the information above is
at the risk of the reader, and PGS disclaims any and all liability
in this respect.
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