PGS has rejected TGS’ $600 million offer for its multi-client library as ‘opportunistic’ given the dire situation for seismic data companies caused by low oil prices.
PGS has rejected TGS’ $600 million offer for its multi-client library as ‘opportunistic’ given the dire situation for seismic data companies caused by low oil prices.
In an unsolicited proposal, TGS claimed that a successful bid would broaden its multi-client geophysical data offering in all major mature and frontier basins world-wide. It added that the offer valued the multi-client data library above the full reported book value and would secure PGS liquidity to repay the $135 million revolving credit facility due in September 2020.
The company also offered to hire PGS’ vessels for future TGS data acquisition after the proposed deal closed.
In rejecting the offer, PGS said it undervalued the multi-client library. ‘The board has unanimously concluded to reject the TGS proposal. PGS is of the view that the value of the company’s multiclient data library is significantly greater to PGS than that represented by the TGS proposal, and that the timing of the proposal is opportunistic given the current market backdrop and macro-economic environment,’ PGS said.
‘PGS remains committed to its integrated service strategy and the benefits to the company and its stakeholders from the combination of multiclient and contract operations. PGS remains focused on its ongoing discussions with its lenders,’ the company added.
