Norway's Shearwater GeoServices has struck a landmark $600m deal to buy US giant Schlumberger's seismic assets and operations, including its 12-ship fleet.
The companies said the GC Rieber geophysical spin-off will buy WesternGeco, subject to regulatory approvals.
The parties expect to close the transaction in the fourth quarter of 2018.
Shearwater said it will operate the combined businesses as a global, customer-focused and technology-driven provider of marine geophysical services.
It will have a fleet of 14 fully equipped seismic vessels offering a full range of acquisition services including 3D, 4D and ocean bottom seismic (OBS), plus a portfolio of proprietary streamer technology and processing software enabling effective execution of geophysical surveys and delivery of high-quality data.
“We will combine two strong complementary businesses and create an industry-leading full-service geophysical company with a solid financial and strategic platform,” said 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.”
Shearwater will have close to 600 employees and operate in all major offshore basins around the world.
“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,” added Basili.
“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.”
High-end ships acquired
The deal includes 10 high-end seismic acquisition vessels, including seven 3D vessels and three multipurpose vessels (MPVs) configured to serve the growing OBS market, as well as 12 complete streamer sets with spares and two source vessels.
The proposed transaction also includes WesternGeco proprietary marine seismic technology, as well as development and manufacturing facilities in Norway and Malaysia.
WesternGeco president Maurice Nessim said: “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 multiclient library, advanced seismic imaging and interpretation services, with the aim of helping to accelerate hydrocarbon discovery.”
New equity and debt
Shearwater, a joint venture between GC Rieber and Rasmussengruppen, is paying cash based on the enterprise value of $600m, plus a 15% post-closing equity interest in Shearwater.
Schlumberger will for a limited period be entitled to payments under an earn-out agreement linked to future vessel usage over and above specific thresholds.
The companies said that to ensure a more robust financial platform, an additional $50m of cash will be injected into Shearwater for working capital purposes, bringing the total cash funding requirement to $650m.
This is being funded through $325m in new equity and $325m in debt financing from DNB and Sparebank.
Rasmussengruppen has fully underwritten the equity issue and GC Rieber intends to subscribe for about $28m of this.
The move represents a strong new move for Rasmussengruppen in offshore shipping after it sold its holding in Danish bulker owner Norden at the end of last year.
GC Rieber CEO Christian Berg said: "This combination will make Shearwater a leading global and technology-driven full-service provider of marine geophysical services with a strong financial platform able to deliver exceptional customer solutions.
"We are very pleased with this transaction, which is in line with the strategic ambition we had when creating Shearwater in 2016 together with Rasmussengruppen.
Reiber stake cut
"We are satisfied with yet again being instrumental in developing market leading companies, while capitalising on our investment".
Rieber's participation will be financed initially through a shareholder loan provided by GC Rieber AS, its largest shareholder.
Following closing, GC Rieber intends to carry out a rights issue to refinance the loan.
Its ownership in Shearwater will be cut from 50% to 20%. Rasmussengruppen and Schlumberger will hold 65% and 15% respectively.
GC Rieber expects to book a non-cash gain of $32m as a result of the transaction.
Under the terms of the agreement, Schlumberger will have an option to use two vessels on potential multiclient work for the first two years after closing the transaction.
Carnegie and DNB Markets acted as financial advisor to Shearwater in connection with the transaction and Arntzen de Besche acted as legal advisor.
Pareto Securities acted as financial advisor and Advokat firmaet Schjodt as legal advisors for Schlumberger.
