Norwegian energy data companies PGS and TGS announced they are merging to create a full-service energy data company.
TGS shareholders will earn approximately two-thirds and PGS shareholders approximately one-third of the new company when the merger is complete, according to the company’s Sept. 18 announcement.
The companies are expected to enter into definitive merger agreements in October and complete the transaction in the first half of 2024. TGS’ CEO Kristian Johansen and CFO Sven Børre Larsen will stay on in their respective roles in the new company.
“Our clients will benefit from scale, a unique technology portfolio and premier service quality,” Johansen said. “Bringing together two distinct, yet complementary companies positions us even better for a continued upcycle in the energy sector.”
The transaction will establish the combined company as a full-service geophysical data company with offerings in streamer data acquisition, ocean bottom node data acquisition, imaging and new energy data. The transaction is expected to help mitigate supply chain risks and add further to economies of scale and efficiency.
The combined company will offer customers a global seismic library with data from all active basins in both the western and eastern hemispheres. For streamer acquisition, the company will hold an operational fleet of seven 3D data acquisition vessels, and for ocean bottom node acquisition. It will also have approximately 30,000 mid and deepwater nodes. Within imaging, the combined company will offer services to in-house and external customers integrating on-premises and cloud based high-performing computing services.
The companies said in a statement that they see significant growth opportunities in new energy with complementary technology offerings for carbon capture and storage and offshore wind.
"The seismic industry is changing whereby production seismic is becoming increasingly important alongside the traditional exploration seismic,” said Rune Olav Pedersen, president and CEO of PGS. “By combining TGS and PGS’ complementary resources, we create a fully integrated geophysical service provider well positioned to generate significant value for all stakeholders.”
TGS and PGS’ combined company will refinance PGS’ $450 million in senior notes and term loans. Future TGS dividend payments up to closing will be compensated to PGS shareholders. The companies’ full merger plan will be released next month.
Recommended Reading
Permian M&A: Oxy Shops Delaware Assets, Family Oil Cos. Stand Out
2024-05-10 - As operators scour the Permian Basin for M&A opportunities, they’re keeping an eye on a tepid divestiture market. Family-owned oil companies also stand out among the pack of private inventory holders remaining in the Permian, according to Enverus Intelligence Research.
Brett: Oil M&A Outlook is Strong, Even With Bifurcation in Valuations
2024-04-18 - Valuations across major basins are experiencing a very divergent bifurcation as value rushes back toward high-quality undeveloped properties.
Ohio Oil, Appalachia Gas Plays Ripe for Consolidation
2024-04-09 - With buyers “starved” for top-tier natural gas assets, Appalachia could become a dealmaking hotspot in the coming years. Operators, analysts and investors are also closely watching what comes out of the ground in the Ohio Utica oil fairway.
Could Crescent, SilverBow Buy More in South Texas After $2.1B Deal?
2024-05-17 - The combination of Crescent Energy and SilverBow Resources will yield one of the Eagle Ford’s top producers—and the pro forma E&P could look to gobble up more acreage in South Texas after closing.
Dallas Fed Energy Survey: Permian Basin Breakeven Costs Moving Up
2024-03-28 - Breakeven costs in America’s hottest oil play continue to rise, but crude producers are still making money, according to the first-quarter Dallas Fed Energy Survey. The situation is more dire for natural gas producers.