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Technology adoption slowing OHM down

02 September 2008

In an update Offshore Hydrocarbon Mapping (OHM) said that difficult trading conditions experienced in the first half had continued into the second half year to 31 August 2008.

Demand for Controlled Source Electromagnetic (CSEM) surveys remained at a relatively low level however sales from OHM's expanding Data Library made a strong contribution.

CSEM is an offshore geophysical technique, employing electromagnetic remote-sensing technology to detect the presence and extent of hydrocarbon accumulations below the seabed.

The North Sea Spring/Summer season provided less proprietary survey work than hoped for and there are still delays to the award of substantial contracts elsewhere. Delays in permitting also impacted on OHM's ability to run programs one after the other which adversely affected vessel utilisation.

Despite the prevailing difficult trading circumstances OHM said that CSEM continues to deliver value to its users. "In shallow waters, in the North Sea, we have recently seen excellent correlation between the CSEM prediction and well results. We have also been using EM technology to image sediments below the basalts on the Atlantic Margin in areas where seismic has been unable to give reliable information." said the statement.

Revenues are expecteed to be in the range of £5.9 to £6.3 million with a pre tax loss in the range £5.0 to £5.3 million for the six months to 31 August 2008 putting revenues for the year in the range from £10.6 to £11.0 million and the annual pre tax loss in the £9.0 to £9.3 million range. The Company had cash in hand in excess of £8 million and no borrowings as at 31 August 2008.

Dave Pratt, OHM's Executive Chairman, said:

'CSEM technology is proven to work and I remain optimistic about the eventual wholehearted adoption by industry although adoption is frustratingly slow. Our Data Library is growing well and our research on the integration of seismic and CSEM together with sales channel opportunities emerging from the CGGVeritas alliance will provide opportunities to sell added value services.'






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