Thalassa warns on possible seismic losses due to contract delays

Shares in Thalassa Holdings plunged after the seismic exploration services company revealed it was not likely to meet market expectations for the full year.

The AIM-listed company, whose two subsidiaries operate in the energy services industry, has been affected by a decline in oil prices and economic uncertainty due to ongoing budget reviews in the energy sector.

A number of contracts it had expected to fall before the end of the year have not materialised, which mean revenues will be "materially" below market expectations and that the company "may make a loss for the year".

The company has been working on a "very significant" contract in the Russian Arctic, but this is now pending approval from the US and UK authorities to finalise the deal.

Thalassa said in a statement: "The outlook for 2015 remains uncertain, due to both economic sanctions and export restrictions against Russia and continued pressure on the price of oil."

Neverthless, the group said it remains with a strong balance sheet with current net free cash of $15m.

WH Ireland analysts kept their 'buy' recommendation and gave a 118p target price.

"Whilst the shares will move lower on the back of today’s update and the market backdrop remains particularly challenging, we believe that the group will prove to be one of the emerging winners given the group’s technology and position of competitors," the broker said.

Shares were down 26.67% to 54.27p at 15:32 on Tuesday.