Norwegian oil and gas seismic service provider TGS has submitted a conditional offer for the purchase of the multi-client data library from compatriot rival PGS for a price of $600m.
Additionally, TGS 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.
TGS believes that 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 also secure the liquidity required to repay PGS’ $135m revolving credit facility due September 2020.
“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,” said Kristian Johansen, CEO of TGS
“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,” Johansen added.