Spectrum has entered into an agreement with the management and shareholders of Australian Seismic Brokers Pty Limited to purchase 100% of the issued share capital of the company. Completion is expected for April 1, 2010.
The consideration is made up of an initial payment of US $1.3million and deferred consideration of up to US $0.6million dependant on achieving defined increased sales levels over the 2 years following completion. ASB had revenue of US $1.5million (unaudited) for the 12 months ended June 30, 2009.
ASB was established in 1988 and is Australia's leading supplier of Multi Client 2D (MC 2D) seismic surveys to the oil, gas and mining industry. The company is based in Perth, Western Australia and has a Multi Client library comprised of over 150,000 km of 2D PSTM reprocessed data from Australia and the Asia Pacific region. In addition ASB has one of the region's largest and most extensive well log data libraries and an analogue library which will allow Spectrum to identify additional new Multi Client opportunities in the region. ASB has 6 employees in Perth and an associated data processing center in Jakarta, Indonesia, with 12 geophysicists.
"Spectrum has worked in partnership with ASB in Australia and South East Asia for several years. Spectrum will use our existing Far East library together with the ASB data and leverage ASB's experience and excellent client contacts to increase the sales value of ASB's assets," says David Rowlands, Spectrum CEO.
"The ASB acquisition together with Spectrum's existing MC library in India, Indonesia, Timor and Australia will make us a leading Multi Client seismic player in South East Asia and Oceania," Mr Rowlands added.
After the acquisition, Spectrum's MC 2D library will consist of over 400,000 km of Multi Client Seismic Data. Spectrum is planning to invest US $17-20 million in new Multi Client surveys during 2010 and add about 70-80,000 km of 2D data to the library. Targeted reprocessing of the existing library both of Spectrum and the newly acquired data of ASB is a key element of Spectrum's MC strategy and will considerably enhance the value of the enlarged library.
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