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.
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