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Friday, August 7, 2020
TGS-NOPEC Geophysical Company has submitted a conditional offer for the purchase of the multi-client data library of PGS. Under the Offer, PGS would, upon consummation of the sale, receive a cash consideration of USD 600 million. In addition, TGS has proposed that the parties enter into a post-closing collaboration agreement for future PGS multi-client projects, which also would include certain preferential rights for PGS to offer their 3D-fleet for future TGS data acquisition.
The proposed transaction presents an opportunity for PGS and its stakeholders to monetize its multi-client data library in excess of its full reported value, delivering substantial funds to PGS in what are challenging times for the entire seismic industry. The Offer will secure the liquidity required to repay PGS’ $135 million revolving credit facility due September 2020 and will further significantly deleverage the company to support its continued operations and enhance the ability to service the remaining debt.
For TGS, the acquisition of PGS’ multi-client data library would broaden the Company’s offering as a multi-client geophysical data provider in all major mature and frontier basins world-wide.
Commenting on the Offer, Kristian Johansen, CEO of TGS said: “We see a strong complement between our existing business and the PGS data library and the opportunity to leverage our expertise and scale to improve returns. Concurrently, a refocused and refinanced PGS will be a world-leading and highly innovative provider of acquisition technology and marine acquisition capacity, providing a strong platform for creating long-term value for the company´s stakeholders. The proposed transaction is thus aimed at safeguarding customers’ access to leading acquisition technology, high-quality data acquisition capacity and top tier data processing capabilities, whether they choose to purchase data through the contract model or the multi-client model. We believe the consolidation and further partnership between our two companies carries a strong industry logic and we look forward to initiate the dialogue with the management and board of PGS.”
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