PGS Hits 9 Year Low

Shares in Petroleum Geo-Services fell by 3.9 percent yesterday, dropping for a second day on investors' concern that the Norwegian mapper of oil reserves may fail to sell a unit the to China National Chemicals Import and Export Corp.

The shares slid 1.2 kroner to 29.8 kroner, the lowest since February 12th, 1993. The stock has lost forty two percent since May 2nd of this year, when PGS said that it had not yet completed the $215 million sale of its Atlantis natural gas unit to Sinochem.

Failure to complete the sale of Atlantis may impede a planned merger between PGS and rival Veritas DGC and would lead to a credit rating downgrade of at least one notch, Moody's Investors Service has said. PGS's unsecured debt is currently rated “Baa3,” the lowest investment-grade rating.

The Atlantis sale was originally expected to close six months ago. Sinochem, which had a May 27th deadline for completing the purchase, may decide to walk away, analysts said. PGS has to wait until June 28th before it can look for other buyers.

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