Geospace Technologies (NASDAQ: GEOS) acquired all the intellectual property and related assets of the OptoSeis fiber optic sensing technology business from a subsidiary of Petroleum Geo-Services ASA (PGS) in a deal worth up to $25 million in cash.
The OptoSeis fiber optic technology has been successfully deployed by PGS in a marine permanent reservoir monitoring system in the Jubarte Field located offshore Brazil and has also been demonstrated as a viable technology for large-scale cabled land seismic data acquisition systems, according to a company release on Nov. 13.
“The continued adoption of permanent reservoir monitoring (PRM) by exploration and production companies, combined with our leading expertise in PRM systems, prompted the acquisition of the OptoSeis business,” said Walter R. “Rick” Wheeler, president and CEO of Houston-based Geospace Technologies, in a statement.
Wheeler said the successful application of Geospace’s PRM systems has helped E&P operators reduce field risk and improve production economics throughout the lifecycle of the reservoir. Further, the acquisition and integration of the OptoSeis fiber optic technology will complement Geospace’s product catalog of advanced technology offerings.
In addition to the proven effectiveness offshore, the OptoSeis technology also shows relevance as an improved solution for land seismic operations, Wheeler added.
“We are pleased that Geospace has taken stewardship from PGS of the continued development and commercialization of the OptoSeis technology, which stands out as the most advanced evolution of high definition fiber optic sensing,” he said. “In addition, we look forward to cooperating with PGS on future opportunities utilizing this technology where the strength and expertise of both our companies creates significant advantage and synergy.”
Geospace intends to retain each of the PGS employees dedicated to the OptoSeis business and will continue operating the business in Austin, Texas.
Terms of the transaction include an initial cash payment at closing of $1.8 million and contingent cash payments of up to an additional $23.2 million over a five-and-a-half year earn-out period. The contingent cash payments will be derived from revenues generated during the earn-out period from products and services utilizing the OptoSeis fiber optic technology.
Rune Olav Pedersen, president and CEO of Norway-based Petroleum Geo-Services, said in a statement, “As part of reorganizing and streamlining our organization, we started exploring divestiture opportunities for our fiber optic technology early 2018. ... We believe that this transaction will provide the best solution for the customer base, as we bring the best of engineering and manufacturing together with our geophysical services offering.”