TGS (TGS) Barclays CEO Energy-Power Conference summary

Industry trends and outlook

• Oil and gas demand is projected to remain strong through 2050, with Exxon forecasting a 2% increase in oil and 21% in gas demand compared to today.

• Reserve life for major oil companies is declining, dropping from 13 to 9 years in eight years, with exploration and production spending needing to increase to address future supply gaps.

• M&A activity in the E&P sector reached $200 billion last year, the highest in a decade, as companies seek to address reserve shortfalls.

• Seismic industry activity is now concentrated in mature basins, with 70% focused on these areas and continued multi-client investment opportunities.

• New energy sectors, such as offshore wind, geothermal, solar, and CCS, are experiencing rapid growth and driving demand for data and insights.

Strategic transformation and positioning

• The organization has built a comprehensive value chain presence, expanding through key acquisitions and technology integration from 2020 to 2024.

• The PGS merger, completed July 2024, positions the company as a fully integrated leader across all seismic and energy data segments.

• Multi-client investments since 2016 total $4 billion, with the data library now representing over 60% of industry data acquired in the last 8-10 years.

• Operates eight modern seismic vessels and advanced OBN technology, controlling 40% of the global ocean bottom node market.

• Advanced imaging and cloud-based computing enhance data offerings, while new energy solutions target offshore wind, CCS, and solar markets.

Financial performance and synergy realization

• Annual synergy estimates from the PGS merger have been raised to $110–130 million for 2024–2025, with integration costs mainly in Q3 and Q4 2024.

• Plans to refinance PGS's $800 million debt, expecting significant interest savings due to a stronger balance sheet.

• Combined data library book value is close to $1.2 billion, with historical sales-to-investment ratios of 2x and an EV/MC library ratio of 1.8x.

• Magseis Fairfield acquisition achieved an EBITDA multiple of 1.8x and is expected to pay back within four years.

• New energy business revenue grew from $7 million in 2021 to an expected $75 million in 2024, with EBITDA margins rising from 15% to over 20%.