Oslo: TGS-NOPEC Geophysical Company (TGS) has signed a letter of intent with Oslo-listed seismic vessel operator Polarcus to acquire multi-client seismic projects in Northwest Europe and West Africa for a cash consideration of $27.5m, plus a future revenue share agreement.
Dubai-based Polarcus said the agreement includes an upfront cash payment, a tiered revenue share from future sales of the divested MC Projects and further cash payments for costs deferred under existing contractual agreements. The transaction will result in a non-cash impairment of the multi-client library of approximately $65.
Rod Starr, CEO of Polarcus, commented: “The decision to sell a portion of the library provides Polarcus with additional liquidity to navigate the current challenging market environment by monetizing a portion of the asset value while retaining revenue upside from future late sales achieved by TGS. It should be noted that Polarcus is fully committed to continue developing its multi-client business going forward with a disciplined approach.”
Robert Hobbs, CEO, of TGS, added: “We are pleased to announce a Letter of Intent to acquire a high-quality multi-client 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 complimentary to our existing database with minimal overlap.”
The deal is subject to due diligence with a target closing date before July 31.