Yesterday, I was browsing through some of the early GEO EXPRO magazines when I stumbled upon an article written by Halfdan Carstens 20 years ago. He had interviewed the two founders of EMGS, Svein Ellingsrud and Terje Eidesmo, who got the idea of offering marine electro-magnetic surveys, or seabed logging as it was called at the time, during a flight to Houston.
In 2005, the year when the article was published, the company had been on the go for a few years already, and rather successfully as well. Two vessels were in operation, and the team contemplated acquiring a third.
Times have not always been that good, with 2020 being a more recent dip, but yesterday came the sobering news that EMGS is now without a vessel altogether, following the recent completion of a multi-client survey in Norway. The Q3 report reads: “Given the current backlog situation and liquidity position, EMGS expects to require additional funding within the near term to sustain operations and implement any strategic initiative. There can be no assurance that the Company will be successful in securing such funding when required, or that any funding obtained will be on favourable terms. Any potential financing may result in substantial dilution, or even complete loss of value, for existing shareholders.”
Will EMGS be a victim of the global marine seismic acquisition downturn? The timing does not come as a surprise, in a way. It is well-known that the entire marine geophysical business is waiting for the market to turn around. But just as the first signs of the majors picking up acreage in West Africa are coming through, we read about this news from EMGS. It just shows the extent of the low that we are in; the current signs of an upturn may come too late for some.
And that against a backdrop of some successful implementation of the EM technology. Not only in Norway, but also offshore Canada where the results proved instrumental for not drilling a well. The company also acquired a survey in India earlier this year, driven by the country’s desire to boost its own hydrocarbon resources.
But the India project was not enough to create more work on the back of it, as the Q3 report now suggests. Will we miss the happy Norwegians at the major geoscience conferences in the future? They were always quite easy to spot; tall and/or blond. It just demonstrates at what level exploration is currently taking place, and what needs to be done to turn that around.
The signs were already on the wall, with Dag Helland-Hansen recently announcing a temporary posting with another outfit. Will his colleagues follow suit? Personally, I would prefer writing an article about the next survey they secured, but as things look at the moment, that might be a bridge too far.
