Petroleum Geo-Services says market stays strong after Q4 profit jump

OSLO, Feb 26 (Reuters) - Norwegian seismic surveyor Petroleum Geo-Services ASA (PGS) (PGS.OL: Quote, Profile , Research) posted a near seven-fold jump in fourth-quarter operating profits on Monday, narrowly missing analysts' average forecast, and said its market remained strong in 2007, but its shares fell.

PGS, which conducts seismic surveys for the oil and gas industry, reported operating profit of $117.5 million for October-December, up from $16.9 million in the same quarter a year earlier.

The result undershot an average forecast of $126 million in a Reuters survey of nine analysts but came within the range of estimates of from $106 million to $151 million.

"2006 was the best year ever for PGS," Petroleum Geo-Services ASA said in a statement.

"We expect a continued strong seismic market driven by increased exploration and production spending worldwide and the demand for more advanced seismic solutions," Chief Executive Svein Rennemo said in the statement.

Booming oil and gas prices have spurred exploration around the world, lifting the oilfield services industry, including providers of seismic data such as PGS.

PGS's report followed forecast-beating fourth-quarter results on Feb. 8 from smaller Norwegian rival TGS-Nopec (TGS.OL: Quote, Profile , Research) and last month from the world's biggest oilfield services group, Schlumberger (SLB.N: Quote, Profile , Research), whose Western Geco unit is a competitor.

PGS said it expected 2007 operating profit margins in its marine contract business to rise to around 50-55 percent from 41 percent in 2006.

The guidance for profitability in its key business was raised from early December when PGS told investors it expected its operating profit margin on marine contracts would rise to 50 percent in 2007.

The margin on marine seismic contract earnings before interest and tax (EBIT) rose to 49 percent in the fourth quarter, which PGS said was its best marine EBIT margin ever.

In its Onshore division, PGS said it expected 2007 revenues and operating profit to be about in line with 2006.

PGS said it expected multi-client revenues within its Marine division to be somewhat higher than in 2006, and said its saw multi-client investment in this unit at about $180-200 million.

The multi-client business consists of sales of data from a data library to various clients as opposed to seismic surveys carried out exclusively for individual customers.

PGS said in presentation material that its multi-client investments would roughly double in 2007, most of it coming in the first half.

"Increased multi-client investments further reinforce the tight contract market, Rennemo told a news conference. "The rise in 2006 has been substantial and it seems to continue."