TGS NOPEC Geophysical, the multiclient geoscience data provider, has signed a letter of intent to acquire Polarcus’ multiclient library, with the exception of Australia, for USD27.5 million on a cash and debt-free basis.
The transaction is subject to due diligence and final definitive documents with a target closing date on or before 31 July 2015. “Polarcus will continue to have rights to revenue share from the library after TGS has realised a predetermined return on its initial investment,” TGS said in a statement.
“The multiclient library in Northwest Europe and West Africa consists of 22 3D seismic surveys comprising a total area of 40,000 km² and one 2D survey comprising 5,000 linear km. The data covers prime locations within the established hydrocarbon provinces of six countries along the western Atlantic margin corridor since 2011,” TGS said.
Polarcus, a listed Norwegian geophysical services provider with a fleet of seven survey ships, said in its first quarter 2015 interim report on 30 April that its revenues had fallen by a third to USD81.1 million year on year and that it would seek ways to cut costs to meet the challenging trading conditions, triggered by fall in the price of oil.
“We are pleased to announce a letter of intent to acquire a high-quality multiclient library in key areas of future growth for TGS. This acquisition significantly strengthens our 3D-position in established areas in UK, Norway, and West Africa and is very complementary to our existing database with minimal overlap,” said Robert Hobbs, CEO of TGS.
The transaction will be financed with cash and to maintain its strong balance sheet and liquidity position, TGS has received a commitment from its existing lender to expand its current credit facility to USD75 million. “This will enable the company to continue to pursue attractive investment opportunities in a challenging market,” TGS said.
TGS is listed in Oslo and has its financial operations based in Norway, while most of the senior management is based in Houston.