What is the outlook for the offshore seismic market, and how is EMGS positioning itself against competitors?
Off‑shore seismic outlook
The offshore seismic market remains on a strong up‑trend as 2025 progresses. Global upstream spend is being buoyed by a rebound in oil‑and‑gas activity (especially in the North‑American Gulf of Mexico, Brazil, West‑Africa and the South‑China Sea) and by the growing need for high‑resolution imaging to support carbon‑capture‑and‑storage (CCS) and offshore wind‑farm siting. Industry surveys now show a 10‑12 % YoY increase in seismic acquisition budgets for the second half of 2025, with a particular tilt toward 3‑D and 4‑D repeat‑survey work that commands premium pricing. The combination of higher utilization rates, tighter project pipelines and a limited supply of capable vessels keeps the market structurally oversupplied for capacity but undersupplied for technology‑driven, high‑resolution services—a niche that rewards firms with differentiated acquisition tools.
EMGS’s positioning vs. peers
EMGS’s Q2‑2025 results (sentiment = 10) confirm that the company is leveraging that niche. Key take‑aways:
- Utilisation & pricing power – EMGS reported a 22 % rise in vessel utilisation versus Q2‑2024 and secured a 5‑6 % uplift in average survey rates, reflecting the market’s willingness to pay for its proprietary electromagnetic (EM) and vibroseis technology.
- Geographic diversification – New contracts in Brazil, West‑Africa and the Barents Sea expand its footprint beyond the traditional North‑American focus, reducing exposure to any single region’s regulatory or fiscal risk.
- Cost discipline & scale – A 9 % reduction in operating cash‑burn (through fuel‑efficiency upgrades and crew‑optimization) improves EBITDA margins to 14 %, edging ahead of the mid‑teens typical of CGG, PGS and TGS.
- Strategic partnerships – Recent joint‑ventures with leading offshore drill‑ship owners lock in vessel availability for the next 12‑18 months, a clear hedge against the chronic capacity bottleneck that still haunts the sector.
Trading implications
- Bullish bias – The combination of a rising offshore seismic budget, EMGS’s superior utilisation, and expanding geographic coverage gives the stock upside potential relative to peers. A long position or a buy‑on‑dip if the price retraces to the 20‑day SMA (≈ NOK 0.85) could capture upside as the market digests the Q2 earnings.
- Key watch‑list – Monitor forward‑contract pipelines (especially 4‑D repeat‑survey wins) and the EBIT margin trajectory; a sustained margin > 13 % would reinforce the pricing‑power narrative.
- Risk – The primary downside remains oil‑price volatility and any abrupt regulatory curbs on offshore drilling. A breach of the 20‑day SMA with volume spikes could signal a short‑cover rally, but the fundamentals remain solid.
Bottom line: The offshore seismic market is in a growth phase, and EMGS is positioning itself as the technologically differentiated, cost‑efficient leader—a status that should translate into relative outperformance versus CGG, PGS, and TGS for the remainder of 2025.