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TGS Submits Offer to Acquire Multi-Client Data Library of PGS

Gasoil News - Published on Wed, 12 Aug 2020

Image Source: TGS NOPEC Geophysical
TGS-NOPEC Geophysical Company ASA announced that it has submitted a conditional offer for the purchase of the multi-client data library of PGS ASA. 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’ USD 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.

Over the past years the seismic industry has seen a sharp drop in aggregate return on capital caused by a combination of a lower oil price, a more consolidated customer base and over-capacity on the supply side. As a result, industry players have changed their strategy towards specialization such that most companies have become either pure vessel operators or pure multi-client providers. TGS has since its inception focused on an asset light multi-client operation and has grown to become a leading global multi-client seismic company.

PGS has built a significant multi-client library and is a key player in the seismic industry. As opposed to TGS, PGS has been an integrated operator, and is today the only remaining player in the industry pursuing both data acquisition and multi-client seismic strategies.

Following recent market developments, TGS is of the view that a combination of the TGS and PGS multi-client businesses will improve the ability of the industry to deliver best in class services to its customers while creating value for its owners and other stakeholders. TGS strongly believes that the combination contemplated under the Offer will deliver more scale, better data and increased efficiencies in the seismic industry. At the same time, the transaction would position PGS credibly as one of the most solid in the seismic vessel and acquisition industry, supported by a robust balance sheet and strong technologies.

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Posted By : Yogender Pancholi on Wed, 12 Aug 2020
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