PGS TO SELL ONSHORE SEISMIC BUSINESS TO GEOKINETICS
(Thomson Reuters ONE) - HOUSTON, TEXAS and OSLO, NORWAY- Geokinetics Inc. (NYSE Amex: GOK)and Petroleum Geo-Services ("PGS")(OSE: PGS) today announced thatthey have signed a definitive agreement under which US basedGeokinetics, a leading provider of seismic data acquisition,processing and interpretation services, will acquire the onshoreseismic data acquisition business and onshore MultiClient librarybusiness (PGS Onshore Business Unit) of PGS in a cash and stocktransaction valued at approximately USD 210 million, of whichapproximately USD 184 million will be paid in cash. PGS expects anestimated gain on the transaction in the range of USD 10 - 20 millionto be reported in Q1 2010.The final purchase price is subject to certain post-closingadjustments. The transaction is expected to close in the firstquarter of 2010 and is subject to certain customary closingconditions including approval of certain competition authorities, butnot a financing condition.The combination of Geokinetics and the onshore business of PGS willcreate the second largest onshore seismic acquisition company in theworld in terms of crew count and the largest based in the WesternHemisphere. The company will have the assets and technicalcapabilities for up to 38 crews and carry in excess of 207,000equipment channels, more than 150 vibroseis units and possess inexcess of 6,240 square miles of MultiClient library data uponcompletion of current projects in progress.The combined company will be geographically diversified with asignificant presence in Africa, Asia and the Americas. Combined, thetwo companies will offer a broad range of technologies that includetransition zone ("TZ"), ocean bottom cable ("OBC") and landvibroseis, and can compete effectively within the entire onshoreseismic value chain of planning, acquisition, processing andinterpretation services. In 2008, PGS Onshore generated USD 74.2 million in EBITDA onrevenues of USD 273.1 million. For the nine months ended September30, 2009, it generated USD 13.4 million in EBITDA on revenues of USD136.2 million. PGS Onshore had an order book of USD 196 million asof September 30, 2009. (Figures are according to InternationalFinancial Reporting Standards, IFRS).Jon Erik Reinhardsen, President and Chief Executive Officer ofPetroleum Geo-Services comments: "The combination of PGS' andGeokinetics' competence and market presence will create a new forcein the onshore seismic industry. As a future key shareholder, we areexcited about the growth potential and leading market position of thenew Geokinetics. This transaction will add value for ourshareholders, our employees and our customers."Mr. Reinhardsen continues: "At the same time, this transactionestablishes PGS as a focused marine geophysical company. Thestrengthened financial position of PGS will further allow us tocontinue to develop the most efficient fleet and leading edgetechnology in the industry."Richard F. Miles, President and Chief Executive Officer ofGeokinetics, said,"We are extremely pleased to enter into this agreement as itsolidifies Geokinetics' position as the clear leader in the onshoreseismic data acquisition business. With the addition of PGSOnshore's technologies; its broad international operations capable ofworking in diverse climate conditions; its extensive MultiClientlibrary providing multi-year potential and a focus on high-impactdrilling areas or areas of high lease turnover, we will be able toexpand our services, accelerate our entrance into the MultiClientbusiness and enhance our position within the seismic contractorindustry. "Geokinetics has agreed to pay for this acquisition through acombination of cash and common stock. At closing, Geokinetics willissue to PGS a number of 2.15 million shares equal to 19.9% of itscurrent outstanding common shares valued for purposes of thetransaction at USD 12.11 per share. The remainder of approximatelyUSD 184 million will be paid in cash. Following the closing of thetransaction, PGS is expected to be the second largest shareholder ofGeokinetics.The transaction is not subject to a financing condition. Geokineticshas received a bridge financing commitment from RBC Capital MarketsCorporation and in addition, Geokinetics will also explore variouscapital markets financing transactions prior to closing. Furtherdetails are available in today's release from Geokinetics. RBCCapital Markets Corporation served as Geokinetics' financial advisor,while Pareto Securities served as financial advisor to PGS for thistransaction.The Onshore Business unit represented 12 % of the total revenues ofPGS in the first nine months of 2009. PGS expects to report theOnshore Business unit as discontinued operations starting in the Q42009 reporting and 2009 annual report. PGS expects to report a gainon the sale of the Onshore business in Q1 2010 of USD 10 million toUSD 20 million, net of allocated portion of the group's goodwillamounting to USD 35 million and transaction costs.ABOUT PETROLEUM GEO-SERVICES ONSHORE BUSINESSThe onshore business of PGS is engaged in seismic acquisitionoperations on land, including onshore MultiClient library, and inshallow water and transition zones. With capacity for up to 13 crewsin 10 countries, PGS Onshore has widespread international operationswith exposure in Asia, Africa, and South America and has an extensivepresence in Mexico supported through long-term contracts. Itsgeographic capabilities vary from the severe desert conditions of theMiddle East and North Africa to mountain, jungle and swamp regionswhere it manages the logistics of high manpower crews intraditionally challenging environments. PGS Onshore also operateseffectively in the environmentally sensitive terrain of the Arctic.Its high channel capability allows the efficient acquisition ofextremely high density land surveys, and its transition zonecapabilities enable the recording of continuous data sets fromonshore out to operational streamer depths. PGS Onshore also has anextensive MultiClient library with over 5,500 square miles mapped,covering Texas, Alaska, Oklahoma and Wyoming, as well as significantequipment including approximately 85,000 channels and 84 vibratorunits. The onshore business employs approximately 450 regularemployees and 3,400 contracted employees.ABOUT PETROLEUM GEO-SERVICES (PGS)Petroleum Geo-Services is a focused geophysical company providing abroad range of seismic and reservoir services, including acquisition,processing, interpretation, and field evaluation. The company alsopossesses the world's most extensive MultiClient data library. PGSoperates on a worldwide basis with headquarters at Lysaker, Norway.For more information on Petroleum Geo-Services visit www.pgs.comABOUT GEOKINETICSGeokinetics is a leading provider of seismic data acquisition,processing and interpretation services to the oil and gas industryworldwide with over 25 years of experience operating in hard topenetrate markets and expertise in tough, challenging operatingenvironments. It provides seismic data acquisition services bycollecting 2D, 3D and multi-component seismic data in land, TZ andshallow water OBC environments. In addition, it performs work forseismic data library companies. Geokinetics provides seismic dataacquisition services in the United States, Western Canada, theCanadian Arctic, Central and South America, Africa, the Middle East,Australia, New Zealand and the Far East. Geokinetics' globalstrategy and presence allows the easy redeployment of assets to themost attractive regions. Crews use the latest technology and mostappropriate methodology and equipment for each operating environmentand are able to move easily between land and TZ environments. With achannel count of approximately 122,000, it has capacity to operate upto 25 total crews worldwide.ADDITIONAL INFORMATION ON THE TRANSACTIONKey Financial Figures - Onshore Segment- IFRS Quarter Nine months ended ended Years ended December September September 30, 31, 30, 2008 2007 2006 2009 2008 2009 2008 (In thousands of US Dollars)Revenues $273 $246 $263 $ 55 $ 72 $136 $204 074 448 350 334 226 162 350 74 79 62 11 60EBITDA 161 223 684 139 18 13 411 515 035Depreciation and (62 (67 (33 (7 (51amortization 352) 894) 282) 085) (13 (19 760) 838) 082)Operating $ 11 $ 11 $ 29 $ 4 $ $ $ 8profit (loss) 809 329 402 054 4 197 (5 755(i) 671)(i) Operating profit (loss) excludesfinancial items and income taxes. December 31, 2008 2007 2006 (In thousands of US Dollars)Property and $ 57 $ 38 $ 26equipment 889 954 337MultiClient 60 42 27library 392 683 747Total assets 234 161 133(i) 358 654 395(i) Includes cash & cash equivalents and restrictedcash that are not part of the transaction.The amounts above are prepared in accordance with IFRS. Amountsreported previously by Geokinetics are in US GAAP. Certaindifferences between IFRS and US GAAP exist, primarily related to thetreatment of research and development expenses, which may result insignificant differences between the two methods.The employment of Onshore Group President with PGS Onshore Inc willbe discontinued after the transfer of this company to Geokinetics.The discontinuance of the Onshore Group President current position inPGS triggers the right to severance pay under his existing employmentcontract. This severance pay provision has been replaced by a 12month employment offer with another PGS entity and a compensationpackage that addresses the consequences of the transaction for theOnshore Group President.The Board of Directors of PGS Onshore :There is no board for "PGS Onshore" as it is a business unit and nota legal entity.The management group of PGS Onshore is:Eric Wersich PresidentSusan Gair ControllerAndrew Clark GM Worldwide Business DevelopmentNorberto Soto GM Latin America OperationsGerry Gilbert VP Eastern Hemisphere OperationsWayne Millice VP North America OperationsJames Bogardus VP MultiClientBill Pramik VP GeophysicsFORWARD-LOOKING STATEMENTSThe information included herein contains certain forward-lookingstatements that address activities, events or developments that PGSexpects, projects, believes or anticipates will or may occur in thefuture. These statements are based on various assumptions made byPGS, many of which are beyond its control and are subject to certainadditional risks and uncertainties. PGS is subject to a large numberof risk factors including but not limited to the demand for seismicservices, the demand for data from our MultiClient data library, theattractiveness of our technology, unpredictable changes ingovernmental regulations affecting our markets and extreme weatherconditions. For a further description of other relevant risk factorswe refer to our Annual Report for 2008. As a result of these andother risk factors, actual events and our actual results may differmaterially from those indicated in or implied by such forward-lookingstatements. The reservation is also made that inaccuracies ormistakes may occur in the information given above about currentstatus of PGS or its business. Any reliance on the information aboveis at the risk of the reader, and PGS disclaims any and all liabilityin this respect.FOR DETAILS, CONTACT:Tore Langballe, SVP Corporate CommunicationsPhone: +47 67 51 43 75Mobile: +47 90 77 78 41Bård Stenberg, Investor Relations ManagerPhone: +47 67 51 43 16Mobile: +47 99 24 52 35US Investor ServicesPhone: +1 281 509 8712http://hugin.info/115/R/1359005/331098.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 03.12.2009 - 14:22 Uhr
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