TGS-NOPEC Acquires Gulf of Mexico Seismic Data
TGS-NOPEC Geophysical Company has reached agreements to acquire 100% ownership of more than 14,600 square kilometers of 3D seismic data, 435,000 kilometers of 2D seismic data, and all associated derivative and interpretation products in the Gulf of Mexico. While TGS-NOPEC has always held exclusive marketing and distribution rights to the multi-client data and products involved in this transaction, ownership was previously shared with partners through various joint ventures. Under terms of the new agreements, TGS-NOPEC relinquishes its minority interest in the 1,700-square kilometer Green Canyon-Atwater 3D survey to CGG, and will pay approximately $32 million in cash to CGG and one other former joint venture partner over a six-month period. Effective December 1, 2001, TGS-NOPEC retains all licensing revenues from the surveys acquired.
Taking a giant step in its stated objective to increase investment and equity participation in the multi-client 3D sector, TGS-NOPEC now fully owns and controls the Mississippi Canyon 3D Survey along with all derivative pre-stack depth migration products. This state-of-the-art survey, completed in 2001, covers perhaps the most active deepwater region of current exploration and development in the entire Gulf of Mexico. Prior to this transaction, TGS-NOPEC's share of gross licensing revenues from the Mississippi Canyon 3D survey was approximately 17%.
The 2D data in the transaction is comprised of over 30 separate surveys located throughout the U.S. Gulf of Mexico, providing the industry's most modern regional coverage throughout the offshore Texas and Louisiana regions. Many of the newer surveys, including the highly successful Phases 45 and 46, are from deepwater areas. Numerous structural, stratigraphic, lithologic, and velocity interpretation derivative products are also included in the agreement. TGS-NOPEC's previous average ownership stake in these 2D surveys was approximately 50%.
According to Hank Hamilton, Chief Executive Officer of TGS-NOPEC, the purchases represent a golden opportunity for the Company to strengthen its position in the Gulf of Mexico. "TGS-NOPEC has established an excellent track record of earning exceptionally strong returns on investments in high quality multi-client seismic data. Many of the assets acquired in this transaction have been and will continue to be star performers in the world's largest market for multi-client seismic products," Mr. Hamilton stated.
Arne Helland, Chief Financial Officer of TGS-NOPEC, added: "This is the largest single investment we have ever made. We are proud to demonstrate once again to our shareholders our commitment to the strategy of generating healthy growth within our core business. This total transaction will be financed by our current bank deposits and ongoing cash flow from operations."