Geokinetics to buy PGS's onshore seismic business

AP News
Posted: Dec 03, 2009 11:04 AM

Geokinetics Inc., which provides seismic-data services for the oil and gas industry, on Thursday said it will acquire the onshore seismic business of Petroleum Geo-Services in a cash and stock deal valued at $210 million.

The purchase, which will add to the company's earnings next year, expands Geokinetics' market reach to Alaska, Mexico and certain countries in the Middle East and North Africa.

"We expect the combined company to be better positioned to serve our expanded customer base as we will have an enhanced ability to redeploy assets into more attractive markets," said Richard Miles, Geokinetics' CEO.

"Our increased number of crews should also provide longer term contract opportunities with fewer mobilizations which should result in better utilization and profitability."

Geokinetics will pay $183.9 million in cash and issue PGS about 2.15 million shares worth roughly $12.11 each, or $26.1 million, to buy its onshore seismic data acquisition and multi-client data library business. The issued shares represent 19.9 percent of Geokinetics outstanding shares before the issuance, making PGS Geokinetics' second-largest shareholder after Avista Capital Partners.

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The company expects to close the deal in the first quarter of 2010.

Shares of Geokinetics rose 68 cents, or 6.1 percent, to $11.90 in morning trading.