The Norwegian Electromagnetic Geoservices ASA (EMGS) announced today it is to implement a reduction in its cost base following a drop in its level of activity.
According to the seismic acquisition company, this is expected to lead to a series of lay-offs.
“The market is expected to continue to be subdued until the oil price recovers and customers increase their E&P budgets. Cost reductions and cost control will therefore continue to be important focus areas in the company,” EMGS CEO Christiaan Vermeijden, said.
EMGS to Cut Jobs on Activity Drop
“However, we will maintain a footprint in our core markets to be able to efficiently market our services and be ready when the market turns,” the CEO stated further.
The company announced today it is seeking a global reduction in its expenses with employees of approximately 20%.
EMGS won a contract for the Barents Sea in Q3-2016
This will be done through the use of temporary and permanent lay-offs, amongst other measures, the company informed.
As well as this, the cost reduction measures are expected to yield effects in a gradual manner, since lay-offs onshore and offshore are scheduled to follow a different timeline, EMGS explained further.
EMGS to Implement Second Job Cut
In April this year, EMGS had already announced it would slash its global headcount by about 15% to cut costs by up to US$10 million (£8.15 million).
“Whilst the interest in our technology continues to be high, our customers are delaying, cancelling or reducing work scopes, resulting in a lower demand for our services,” the CEO explained at the time.
“Therefore, we continue to focus on cost control and cash flow, and implement changes to increase the efficiency of the organisation,” he stated further.
Earlier in September, EMGS announced a data licensing agreement to provide an unnamed oil company with 3D CSEM data for the Barents Sea from its multi-client data library.
This was the first big contract the company signed since December last year, when it agreed to provide electromagnetic (EM) data for a project located in the US Gulf of Mexico.