Geospace Technologies Corporation (NASDAQ: GEOS) today announced that the company and Statoil have formally executed the definitive agreement for the company to provide 660 kilometers of seabed seismic reservoir monitoring systems for the Snorre and Grane fields on the Norwegian continental shelf. The final contract value is approximately $160 million and requires the systems to be delivered at various intervals extending into fiscal year 2015.
Utilizing the percentage of completion revenue recognition method, the company presently estimates that it will recognize approximately 45%, 40% and 15% of the contract’s revenues in fiscal years 2013, 2014 and 2015, respectively. The company will update its revenue recognition guidance throughout the contractual period as conditions change.
Geospace Technologies Corporation designs and manufactures instruments and equipment used by the oil and gas industry in the acquisition and processing of seismic data as well as in reservoir characterization and monitoring activities. The company also designs and manufactures non-seismic products, including industrial products, offshore cables, thermal printing equipment and film.
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included herein including statements regarding potential future products and markets, our potential future revenues, future financial position, business strategy, future expectations and other plans and objectives for future operations, are forward-looking statements. We believe our forward-looking statements are reasonable. However, they are based on certain assumptions about our industry and our business that may in the future prove to be inaccurate. Important factors that could cause actual results to differ materially from our expectations include the level of seismic exploration worldwide, which is influenced primarily by prevailing prices for oil and gas, the extent to which our new products are accepted in the market, the availability of competitive products that may be more technologically advanced or otherwise preferable to our products, tensions in the Middle East and other factors disclosed under the heading “Risk Factors” and elsewhere in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which are on file with the Securities and Exchange Commission. Further, all written and verbal forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such factors.