S&P changes CGG outlook to positive

S&P said it changed the outlook for CGG to positive from stable and affirmed its CCC+ issuer rating.

The positive outlook reflects the increasing potential capital spending in the oil and gas sector, the agency said.

“While most O&G companies, for now, are guiding only moderate increases in capital spending (10%-15% on average, including the inflation impact), we see the potential for further increases, especially among national oil companies. This might translate into backlog increase and higher pricing for seismic services, although the correlation is indirect and can occur with a lag,” S&P said in a press release.

The agency said it forecasts CGG’s EBITDA to reach $450 million-$500 million in 2023 and higher in 2024 because it expects the margin to continue to improve and projects revenue could continue to grow possibly up to 10%-15% year on year.

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