Company Financials (January 2001)

End year results from Schlumberger, Paradigm and PGS show contrasting fortunes for the service sector.


Income from continuing operations of $735 million and diluted earnings per share of $1.27 were 61% and 57% higher than 1999 (before last years unusual items). Chairman and CEO Euan Baird, citing a 73% increase in pretax operating, anticipates that total activity in 2001 is expected to be well above 2000 levels as oil companies move more aggressively to explore for and to develop new fields and to optimize older fields. Baird considers Schlumbergers domain experience in leveraging Internet technologies sets it out from the crowd.


As the technology bubble fades it is becoming increasingly clear that the winners in the Internet age will be companies with excellent products and market shares in specific verticals who are able to aggressively enhance their business model with these new technologies.


Paradigm forecasts significant growth for 2001 with total revenues targeted to reach $80 million compared to a reported $63 million for 2000. A continued 50% growth in service revenues is also anticipated. Paradigm chairman Eldad Weiss said, We plan to expand our seismic data processing capacity and also to extend our service offering to reservoir studies. We will also offer advanced production oriented seismic analysis - 4D and 4C, and additional leading-edge technologies such as full wave 3D prestack depth migration. Weiss also indicated that Paradigm was planning further acquisitions in 2001, with a focus on petroleum engineering.


The picture from PGS is less rosy, with weaker than expected results for fourth quarter 2000. PGS report that oil company spending on marine seismics has yet to fully recover. Seismic data library sales are expected to remain relatively flat and fourth quarter earnings will be significantly lower than current estimates.


Chairman Reidar Michaelsen said, We are clearly disappointed that the poor market conditions which have prevailed for the past two years have prevented us from achieving full utilization and adequate returns on our assets. However, we have observed a gradual increase in business activity and expect the overall geophysical market to continue its recovery as we move into 2001. The Company has now sold its interest in Spinnaker Exploration and its data management business and, further, intends to sell or otherwise realize value from other non-core assets during 2001. The sale of these investments in recent weeks has improved the Company's liquidity position and allowed it to reduce outstanding debt. We remain committed to the sale of the remaining non-core assets which should allow for further debt reduction in 2001.

Stop press!! PGS president Bjarte Bruheim resigned effective 7 February 2001.

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