Geospace Technologies (NASDAQ: GEOS) today announced that it has acquired from PGS Americas, Inc. (“PGS”) all the intellectual property and related assets of PGS’s OptoSeis® fiber optic sensing technology business. Geospace intends to retain each of the PGS’s highly qualified employees dedicated to the OptoSeis® business and will continue operating the business in Austin, Texas.
The OptoSeis® fiber optic technology has been successfully deployed by PGS in a marine permanent reservoir monitoring system in the Jubarte field located offshore Brazil and has also been demonstrated as a viable technology for large scale cabled land seismic data acquisition systems.
Terms of the transaction include an initial cash payment at closing of $1.8 million and contingent cash payments of up to an additional $23.2 million over a five-and-a-half year earn-out period. The contingent cash payments will be derived from revenues generated during the earn-out period from products and services utilizing the OptoSeis® fiber optic technology.
Commenting on the acquisition, Walter R. ("Rick") Wheeler, President and Chief Executive Officer of Geospace Technologies Corporation, said, “The continued adoption of permanent reservoir monitoring (PRM) by exploration and production (E&P) companies, combined with our leading expertise in PRM systems, prompted the acquisition of the OptoSeis® business. For well over a decade, successful application of Geospace’s PRM systems has provided E&P companies with a more vivid image and clearer understanding of reservoir characteristics, which has helped E&P operators reduce field risk and improve production economics throughout the lifecycle of the reservoir. The acquisition and integration of the OptoSeis® fiber optic technology strategically complements Geospace’s product catalog of advanced technology offerings. In addition to the proven effectiveness of OptoSeis® for offshore PRM, the technology also shows relevance as an improved solution for land seismic operations that require large channel count cabled systems, including its potential use for border and perimeter security. We are pleased that Geospace has taken stewardship from PGS of the continued development and commercialization of the OptoSeis® technology, which stands out as the most advanced evolution of high definition fiber optic sensing. In addition, we look forward to cooperating with PGS on future opportunities utilizing this technology where the strength and expertise of both our companies creates significant advantage and synergy.”
Rune Olav Pedersen, President and CEO of Petroleum Geo-Services ASA, the ultimate parent company of PGS, said, “As part of reorganizing and streamlining our organization, we started exploring divestiture opportunities for our fiber optic technology early 2018. We are very pleased that Geospace, a leader in engineering and manufacturing of seismic technologies will acquire the OptoSeis® fiber optic technology and personnel and continue offering this unique solution for permanent reservoir monitoring. PGS looks forward to support and complement Geospace’s offering with survey planning, imaging and acquisition services as and when required by their customers. We believe that this transaction will provide the best solution for the customer base, as we bring the best of engineering and manufacturing together with our geophysical services offering.”
About Geospace Technologies
Geospace Technologies Corporation (www.geospace.com) principally designs and manufactures seismic instruments and equipment. The company primarily markets its seismic products to the oil and gas industry to locate, characterize and monitor hydrocarbon producing reservoirs. The company also markets its seismic products to other industries for vibration monitoring, border and perimeter security and various geotechnical applications. The company designs and manufactures other products of a non-seismic nature, including water meter products, imaging equipment and offshore cables.
About PGS
PGS Americas, Inc. is a wholly owned subsidiary of the ultimate parent company Petroleum Geo-Services ASA. Petroleum Geo-Services ASA and its subsidiaries (the “Company”) is a focused marine geophysical company that provides a broad range of seismic and reservoir services, including acquisition, imaging, interpretation, and field evaluation. The Company’s MultiClient data library is among the largest in the seismic industry, with modern 3D coverage in all significant offshore hydrocarbon provinces of the world. The Company operates on a worldwide basis with headquarters in Oslo, Norway and its share is listed on the Oslo stock exchange (OSE: PGS).
Forward Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as “may”, “will”, “should”, “intend”, “expect”, “plan”, “budget”, “forecast”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue”, “evaluating” or similar words. Statements that contain these words should be read carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position or state other forward-looking information. Examples of forward-looking statements include, among others, statements that we make regarding our expected operating results, the results and success of our transactions with the OptoSeis® technology, the adoption and sale of our products in various geographic regions, anticipated levels of capital expenditures and the sources of funding therefore, and our strategy for growth, product development, market position, financial results and the provision of accounting reserves. These forward-looking statements reflect our current judgment about future events and trends based on the information currently available to us. However, there will likely be events in the future that we are not able to predict or control. The factors listed under the caption “Risk Factors” and elsewhere in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which are on file with the Securities and Exchange Commission, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Such examples include, but are not limited to, the failure of the OptoSeis® technology transaction to yield positive operating results, decreases in commodity price levels, which could reduce demand for our products, the failure of our products to achieve market acceptance, despite substantial investment by us, our sensitivity to short term backlog, delayed or cancelled customer orders, product obsolescence resulting from poor industry conditions or new technologies, bad debt write-offs associated with customer accounts, lack of further orders for our OBX systems, failure of our non-seismic products to be adopted by the border and security perimeter market, infringement or failure to protect intellectual property, and any negative impact from our restatement of our financial statements regarding current assets. The occurrence of the events described in these risk factors and elsewhere in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q could have a material adverse effect on our business, results of operations and financial position, and actual events and results of operations may vary materially from our current expectations. We assume no obligation to revise or update any forward-looking statement, whether written or oral, that we may make from time to time, whether as a result of new information, future developments or otherwise.
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Contacts:
Rick Wheeler, 713.986.4444
President and
CEO
