ION Geophysical Corporation (NYSE:IO) has been gaining significant momentum over the last year. IO stock surged more than 325% in the past twelve months alone.
ION Geophysical is an oilfield services company. The improving oil prices and strengthening investments from exploration and production companies provided the support to ION Geophysical stock.
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Oil prices had experienced substantial volatility in the past three years. After declining to the lowest level of $27 per barrel at the beginning of 2016, oil prices increased steadily in the next two years.
The company’s latest financial results indicate improving market dynamics for oilfield services companies. ION has beaten revenue and earnings estimate for the fourth quarter of fiscal 2018 by a wide margin of $6.2 million and $0.43 per share.
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Its revenue of $57.9 million in the final quarter rose 64% from $35.4 million in the year-ago period. Excluding Ocean Bottom Seismic Services revenues, full-year revenue enlarged 45% compared to the past year.
Revenue from its E&P Technology & Services segment contributed significantly to the total revenue growth. E&P Technology & Services segment revenue enlarged 174% year over year to $30.3 million, driven by 3D multi-client reimaging programs in Mexico and Brazil along with the support from new 2D multi-client programs.
Brian Hanson, the Company’s President, and Chief Executive Officer commented, “We had tremendous success with our 3D reimaging programs, expanding our 3D data library from 8,000 sq km to over 165,000 sq km in just two years. Also, after two years of very little new venture activity, we launched five new programs in 2017, and already secured underwriting for new programs in 2018.”
ION Geophysical Corporation expects to sustain momentum in 2018. Market fundamentals appear strong as oil prices are trading around the highest levels in the past three years.
A stronger oil price enables E&P companies to invest in growth opportunities. Thus, with the liquidity position of $68 million, ION Geophysical looks in position to capitalize on increasing demand for oilfield services.
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