CGG, Shearwater GeoServices form strategic partnership

PARIS -- CGG has signed a binding term-sheet with Shearwater GeoServices Holding AS (Shearwater) for a strategic partnership for marine seismic acquisition services and creation of a new streamer technology company.

The term-sheet covers the purchase of five high-end streamer vessels jointly owned by CGG Marine Resources Norge AS and Eidesvik Offshore ASA (Eidesvik Offshore) by Shearwater, with mutual commitments of securing CGG access to strategic vessel capacity for future multi-client projects while securing Shearwater a commitment of cash flow and activity for multiple years. Additionally, the term-sheet covers the creation of a technology partnership, under the Sercel brand name and CGG’s majority ownership, for the development, manufacturing, commercialization and support of marine streamer seismic acquisition systems.

CGG will continue to operate the vessels and execute on-going acquisition contracts and customer commitments until deal closure.

It is the intention of both companies to execute final transaction agreements before the end of June with closing planned before year-end. The final transaction agreements are subject to approval by lenders of Global Seismic Shipping AS (GSS), the ship-owning company jointly held by CGG and Eidesvik Offshore ASA.

The completion of the transaction is subject to approvals by the competent authorities and other customary conditions in relevant countries, including work council consultation.

The term-sheet includes agreements for a five-year utilization commitment for an annual minimum of two vessel-years over the period. The agreement for vessel capacity will ensure CGG access to strategic capacity for its future multi-client projects through Shearwater’s global fleet of 21 high-end 3D and OBS vessels. Following this transaction Shearwater will have a fleet of 23 vessels, including three OBS MPVs and two dedicated source vessels.

At the same time, it will provide Shearwater with a guaranteed cash flow and activity level, resulting in a greatly improved visibility and more robust business models for both companies. The vessel acquisition will be a pure asset transfer, which will include two additional legacy vessels. Shearwater will assume the net liabilities associated with the vessels at time of completion. Shearwater will also take over five complete streamer sets owned by CGG.