BERGEN, Norway and HOUSTON – Shearwater GeoServices Holding and Schlumberger have entered a definitive agreement under which Shearwater will acquire the marine seismic acquisition assets and operations of Schlumberger subsidiary WesternGeco.
Pending regulatory approvals, the transaction should be completed during 4Q.
Shearwater will operate the combined businesses as a global, “customer-focused and technology-driven provider ofmarine geophysical services,” the company said.
It will own and operate a fleet of 14 fully equipped seismic vessels offering a comprehensive range of acquisition services including 3D, 4D, and ocean bottom seismic (OBS). At the same time, it will continue to develop high-end processing and imaging services and Reveal software, with a portfolio of proprietary streamer technology and processing software to assist execution of geophysical surveys and data delivery.
“We will combine two strong complementary businesses and create an industry-leading full-service geophysical company with a solid financial and strategic platform,” says Irene Waage Basili, CEO of Shearwater. “Our strategy has been to build a stronger company during the downturn, and we are very pleased to see the commitment made by our owners, which enables this transaction.”
On completion of the transaction, the company will have nearly 600 employees and will operate in all major offshore basins.
“Our customers will benefit from our expansion as a full-service provider that has critical mass, global reach and long-term viability. We intend to grow, and we are committed to investing in technology and people to drive the efficiency of our services,” Basili added.
“We will have a strong balance sheet with the sector’s lowest loan-to-value ratio and a leading cost position, which together with our technology and highly skilled people provide significant competitive advantages.”
Maurice Nessim, president, WesternGeco, commented: “With the divestiture of our marine seismic acquisition business, WesternGeco will be strategically positioned as one of the largest asset-light geophysical services providers in the oil and gas industry.
“Through access to the industry’s global marine fleet, including Shearwater’s vessels, we will continue to provide our customers with exploration and discovery services that leverage our leading global multi-client library, advanced seismic imaging and interpretation services, with the aim of helping to accelerate hydrocarbon discovery.”
Under the agreement, Shearwater will gain 10 high-end seismic acquisition vessels, including seven 3D vessels and three multi-purpose vessels suited to the growing OBS market, 12 complete streamer sets with spares, and two source vessels.
In addition, the transaction also includes WesternGeco proprietary marine seismic technology, and development and manufacturing facilities in Norway and Malaysia.
Schlumberger will receive cash consideration based on an enterprise value of $600 million and a 15% post-closing equity interest in Shearwater GeoServices Holding AS. And over a limited period, Schlumberger will be entitled to payments under an earn-out agreement linked to future vessel usage over and above certain thresholds.
The cash consideration and an additional $50 million cash injection into Shearwater for working capital purposes will be funded by $325 million in new cash equity and $325 million in debt financing.
Finally, Schlumberger will have the option to use two vessels from Shearwater on potential multi-client jobs for the first two years after closure of the transaction.