![]() As of December 31, IO’s backlog for Marlin was $2 million. The application helped upstream operators avoid various operational conflicts and associated downtime, thus saving costs for them. On top of that, IO’s Marlin operations optimization software doubled in 2018 with 60 new deployments. IOs Gator software is the central hub that integrates and manages data and helps perform complex multivessel ocean bottom operations. The company received two new contracts and tree extensions for its Gator technology systems. IO’s ocean bottom activity and Marlin deployments increased in Q4 following higher command and control software systems sales. Now let us check out the drivers for each of the segments to understand where IO is going at its current state. ![]() Year over year, gross profits for the E&P Technology & Services and the Operations Optimization segments increased by 53% and 47%, respectively. Both these segments also witnessed strong gross profit improvement. Analyzing IO’s Q4 performanceįrom Q4 2017 to Q4 2018, IO’s E&P Technology & Services segment revenues increased by 26%, while the Operations Optimization segment saw 43% revenue growth. Let us now see how these factors affected the company’s revenues and margin in Q4. As a result, its imaging services backlog increased by $9 million after January 2019. Recently, IO received three awards for such projects. These technologies offer betterment in image quality and productivity. ![]() The other significant improvement for IO was the success in its new technology offerings, which includes Full Waveform Inversion data processing technology and OBS acquisition systems. ![]() During 2018, the company was able to keep pricing firm in that program, despite the general lack of investment in the offshore projects. IO initiated this program in August 2017 to understand the complex petroleum systems in the Campos and Santos basins in Brazil. The most remarkable growth came from its Picanha 3D reimaging program in offshore Brazil. IO’s area under the 3D data library increased by 36% in 2018 compared to 2017. Of these, three were 2D multi-client programs and four were 3D multi-client reimaging programs. Ion Geophysical invested $28 million in the multi-client data library in 2018, sanctioning seven new programs. OIH represents the oilfield equipment & services (or OFS) industry. In the past year, IO stock price has gone down by 43.5% and underperformed the VanEck Vectors Oil Services ETF ( OIH), which declined by 35% during this period. However, the company’s traditional offshore-based business in Mexico and Panama has continued to suffer from policy uncertainties. military sector, which can turn out to be a huge market. Its software-based products have found progressively higher usage in the U.S. IO’s 3-D reimaging program in Picanha in offshore Brazil should also boost growth. Ion Geophysical will look to improve its revenues when the upstream operators increase capex investment and the company’s new venture programs gain momentum. Unless offshore capex starts picking up and the crude oil price stabilizes, sustained growth for the company remains doubtful. I do not think IO will be able to keep its momentum going in the short run because of several industry headwinds. ION Geophysical ( IO) provides geoscience products, services, and solutions that allow upstream energy companies to obtain the earth’s subsurface images.
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