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SAExploration sees growth in Alaska Seismic company credits North Slope for bump in North American revenue, projects optimism for 2016 and 2017 ERIC LIDJI For Petroleum News
The seismic firm SAExploration Holdings Inc. saw “significant growth” in its Alaska operations through the first three quarters past winter that may continue into 2016.
In a recent third quarter earnings statement, the Houston-based company with operations on four continents attributed a 41.4 percent year-over-year growth in revenue for its North America segment largely to its operations on the North Slope, crediting “favorable market and regulatory conditions for oil and gas producers.” The company earned $56.3 million during the third quarter and $157.8 million through the first nine month of the year, compared to $39.8 million and $119.8 million, for the same periods last year.
While SAExploration expects the fourth quarter to be “less robust” than the first three because of high startup costs associated with preparations for winter operations on the North Slope, the company expects Alaska to play an important role in the coming year.
“In North America, we have benefited greatly from a strong and active Alaska market thanks to the high barriers to entry we established in prior years which has led to a strong position because of our competitive advantages,” President and CEO Brian Beatty said during a conference call with analysts on Nov. 5. “Overall onshore activity is seasonally lower this time of year compared to the upcoming winter season, but we expect Alaska will continue to be a key driver for us in 2016 as it was the first nine months of 2015.”
The company operates both on the North Slope and in Cook Inlet.
Concern about credits? As a seismic company, SAExploration is involved primarily in the exploration phase of oil and natural gas operations, which provides a glimpse at the spending in Alaska.
In a September 2015 investor presentation, the company partially credited tax incentives for increased activity in Alaska. With persistently low oil prices challenging state finances, Gov. Bill Walker vetoed $200 million in credits earlier this year. Some policymakers have been questioning whether to continue providing other credits, and the issue is likely to become a major feature of the next regular session in January.
Asked about the future of tax credits for exploration, Beatty downplayed concerns.
“I think everybody is seeing the headlines that are coming out from the governor’s office on the reduction or elimination of the tax credit and it’s really not a lot of news for those that work closely in Alaska,” he said. With the veto, SAExploration expects a reduction for one credit in January and the end of another in July, Beatty said. While he acknowledged that some of the larger players on the North Slope had reduced activity levels in the final months of 2015 and into 2016, “we’re starting to engage them on work for 2017, so we’re pretty comfortable that Alaska will stay strong for us,” he said.
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