OSLO, Norway, June 20, 2007 (PRIME NEWSWIRE) -- Petroleum Geo-Services ASA ('PGS') (OSE:PGS) (NYSE:PGS) announced today that it 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 US$275 million on a debt free basis. US$18 million of the purchase price is to be settled in PGS shares. A total of US$18 million of the total consideration (US$9 million of each the cash and share consideration) will be paid over time as deferred payment to management shareholders.
MTEM(r) -- 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 MTEM's technology. For MTEM this is a perfect match and we look forward to working together with PGS."
PGS invites to a briefing today at Thon Hotel Vika Atrium, Vika Auditorium, Munkedamsveien 45 OSLO, Norway, at 10:15 (CET).
PGS management will also inform through a conference call today at 16:00 (CET). To access the live broadcast of the conference call by telephone, please dial-in at the number provided below, corresponding to your location. The conference ID is 4658358.
Location Dial-In Number
Norway (toll free) 800 19 395
International (toll) +44 145 255 2510
UK (toll free) 0800 694 2370
U.S. (toll free) 1866 966 9444
Petroleum Geo-Services is a focused geophysical company providing a broad range of seismic and reservoir services, including acquisition, processing, interpretation, and field evaluation. The company also possesses the world's most extensive multi-client data library. PGS operates on a worldwide basis with headquarters at Lysaker, Norway.
For more information on Petroleum Geo-Services visit www.pgs.com.
The information included herein contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties as disclosed by the Company in its filings with the Securities and Exchange Commission including the Company's most recent Annual Report on Form 20-F for the year ended December 31, 2006. As a result of these factors, actual events may differ materially from those indicated in or implied by such forward-looking statements.