CGGVeritas (GA), the world's biggest surveyor of oil and natural-gas fields, said first-quarter profit almost tripled on accelerating demand for energy exploration.
Net income rose to $91 million, or $3.47 a share, from $32 million, or $1.24, a year earlier, the Paris-based company said in a statement today. It was the first earnings report from CGGVeritas, created last year when Massy, France-based Compagnie Generale de Geophysique SA bought Houston-based Veritas DGC Inc. Sales rose 22 percent to $777 million.
``This is clearly a reflection of what the company can achieve,'' Paul Andriessen, an analyst at Fortis with a ``buy'' on the stock, said by telephone from Amsterdam. Results from CGGVeritas's ``multiclient'' and seismic businesses performed above expectations, he said.
CGGVeritas is benefiting from a surge in offshore oil exploration as drillers embark on more costly and technologically complex exploration projects to boost reserves. The company specializes in carrying out studies and selling equipment aimed at estimating the size of energy reserves.
``We anticipate demand in the seismic market will remain strong into 2009,'' Chief Executive Officer Robert Brunck said in a conference call with reporters. CGGVeritas's order backlog as of May 1, 2007, is $1.65 billion, he said.
``Oil reserves are becoming much more difficult to reach. Better imagery is needed,'' Brunck said of the prospects for future oil exploration. ``Deepwater wells are expensive so companies will need much better images before deciding on investment.''
The company's shares fell 1.54 euros, or 0.92 percent in Paris. They have risen 0.77 percent this year, giving the company a market value of 4.51 billion euros.
The newly merged company has an imagery library of about half of all ``ultradeep'' offshore exploration blocks, he said. ``This sells better than the two separate libraries, especially in the Gulf of Mexico.''
Brunck confirmed a 2007 sales forecast of more than $3 billion, with a margin on earnings before interest, taxes, depreciation, and amortization of 40 percent.
Cost-savings from the merger were raised to more than $75 million in 2008 from a previous estimate of $65 million, Brunck said.
The combined group is currently operating 20 vessels and is expecting to add two more this year, one in July and one in September, Brunck said, adding that an old Veritas vessel will soon be pulled from service.
Each new vessel adds ``significantly'' to sales, he said. One vessel, working on an exclusive client contract, can earn an additional $60 million annually for the group.
Geophysique was founded in 1931 by Conrad Schlumberger and did its first survey in West Africa.
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