CGGVeritas Takes a 6% Hit After Brazilian Offshore Deals Fall Through

Oceanic Vega cggveritas geoseismic ship
The Oceanic Vega was delivered to CGGVeritas in July 2010 featuring a 190T rated bollard pull and 20 streamer winches, carrying Sercel Sentinel® solid streamers and 20 tow points. Image: CGGVeritas

CGGVeritas, the largest seismic surveyor of oilfields, slumped by the most in more than three months in Paris trading after saying potential deals in Brazil failed to “fully materialize” by the end of the year.

The company fell as much as 6 percent, the biggest drop since Sept. 24, to 21.65 euros, the lowest level since Nov. 19. So-called multiclient sales are seen falling to $150 million in the fourth quarter, from $199 million a year earlier, on Brazil.

Today’s release suggests 2012 estimates are “challenging” and may be lowered, Gilbert Dupont analysts wrote in a report.

“Significant potential deals discussed with main clients did not fully materialize by the year-end due to uncertainty remaining on the future offshore blocks to be licensed in the upcoming 2013 bid rounds,” CGGVeritas said in a statement.

It fell 5.4 percent to 21.79 euros by 10 a.m. in Paris.

The company rose 31 percent last year as offshore oil and gas producers have boosted spending on exploration amid growing energy demand and depleting resources. Seismic surveyors like CGGVeritas use ships to search for oilfields under the seabed.

The company agreed last year to buy Fugro NV’s geoscience division for 1.2 billion euros ($1.6 billion) to benefit from an expected recovery in the rates for surveying. The purchase will add four seismic-survey vessels to CGGVeritas’s fleet.

– Tara Patel, Copyright 2013 Bloomberg.

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