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 its 3D fleet for future TGS data acquisition.
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.
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 worldwide.
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.”
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 stakeholder
The offer is subject to a customary, limited scope, confirmatory due diligence and entering into definitive agreements for the transaction, and completion will be conditional upon any required approvals by an extraordinary general meeting in TGS in respect of the equity financing of the transaction, and other customary closing conditions, including relevant regulatory approvals.
ABG Sundal Collier ASA is engaged as financial advisor and Advokatfirmaet Thommessen is acting as legal counsel to the company in connection with the offer.