PGS to Acquire MTEM
Petroleum Geo-Services ASA ('PGS') has entered into a definitive agreement to acquire MTEM Limited ('MTEM'), a provider of electromagnetic (EM) services used to detect the presence of hydrocarbons, for a price of USD 275 million on a debt free basis. USD 18 million of the purchase price is to be settled in PGS shares. A total of USD 18 million of the total consideration (USD 9 million of each the cash and share consideration) will be paid over time as deferred payment to management shareholders.
MTEM - an abbreviation for Multi-Transient Electro-Magnetic - has developed a unique, breakthrough, cable-based EM technology with demonstrated, strong results in commercial operations. The company is the only player to offer a complete EM acquisition and processing technique both offshore and onshore, including in Transition Zone environments.
MTEM is a robust, patent protected technology and the company currently has several supplementary patent applications pending. The technology is highly complementary to PGS' own development of towed EM, the technologies together positioning PGS to address the emerging EM market.
MTEM was established in 2004 as a spin-out from the University of Edinburgh, Scotland. MTEM's technology is differentiated from competing EM technologies in that it is cable based, not node based, hence allowing acquired data to be accessed real-time. This provides the possibility to continue recording data until the quality is satisfactory before moving the equipment, reducing the risk of having to repeat the process and improving on time to delivery. Experienced personnel from international oilfield service and seismic companies have recently been recruited into the company and the integration of MTEM into PGS' global business platform will further bolster the commercial acumen within the business. MTEM currently operates two onshore crews and one offshore crew. It has its headquarters in Edinburgh, Scotland and has 67 employees and satellite offices in Houston, Calgary and Aberdeen. The company is in the early phase of commercialization, posting revenues in the first quarter 2007 of approximately GBP 1.5 million (unaudited).
MTEM is currently owned by Energy Ventures, HitecVision and Scottish Equity Partners, each holding approximately 22% of the shares, and by MTEM management and the University of Edinburgh, holding the remaining 35% shares. After the acquisition, PGS will own 100% of the company.
PGS Group President of Data Processing and Technology, Sverre Strandenes, stated the following:
"Through the acquisition of MTEM, PGS is accelerating its entry into the high growth EM market. Being the only player to offer a complete EM acquisition and processing technique both offshore and onshore, we believe the company to be a perfect fit within PGS. MTEM's technology will help accelerate the development of our own towed EM technology, enabling PGS to offer a unique total service offering comprising seismic and EM in all environmental settings. We believe that the current MTEM technology delivers the highest resolution within EM, and we are extremely impressed by the company's people and technology as well as its patent portfolio."
CEO of MTEM, Leon Walker, commented:
"We believe that a combined seismic and EM company will gain a stronger market position than as a stand-alone EM player. PGS' experience and size within Land and Offshore operations, marine rigging expertise, HSE track record, world wide market organization and presence and reputation will accelerate the commercialization of MTEMs technology. For MTEM this is a perfect match and we look forward to working together with PGS."
- PGS to Acquire MTEM (Jun 20)
- Trinidad Bowled Over By MTEM Success (Apr 25)
- Will North Sea Project Lead to Lower Dry Hole Risk? (Mar 28)
Company: Petroleum Geo Services ASA more info
- Borders & Southern Pens Seismic Deal with PGS (Oct 02)
- Chariot Raises Funds as it Prepares for Tapir South Drill (Mar 20)
- Petroleum Geo-Services Briefs Prelimeinary Results for 4Q, FY10 (Feb 17)