Troubled Cyprus-based oil industry services provider SeaBird Exploration on Monday agreed to sell its seabed data unit to Dutch infrastructure surveyor Fugro for $125 million as it struggles to repay debt.
Fugro will also charter vessel capacity from SeaBird, according to two contracts worth at least $75 million in total, as part of the tentative deal.
Shares in SeaBird, which is listed on the Oslo stock exchange, almost doubled on the news, giving it a market capitalisation of 76 million Norwegian crowns. Fugro shares fell 4 percent by 1429 GMT as Amsterdam’s blue chip index was down 1.6 percent.
“This is the first step in a process designed to cure the financial situation, stabilise the company and allow us to bring value back to stakeholders,” SeaBird Chief Executive Tim Isden said in a statement.
SeaBird is considered to be on the verge of bankruptcy, having breached loan covenants and delayed its bond payments. Its net debt and borrowings rose to $209 million at the end of the second quarter, up from $155 million a year ago.
At the start of the year it struck a cooperation pact with Norway’s Petroleum Geo-Services (PGS) that included a five-year convertible loan of 240 million Norwegian crowns. Many investors had seen this as a precursor to a takeover by PGS.
On Friday PSG said it would withdraw two directors from SeaBird’s board to avoid any perception of conflict of interest given the restructuring. But as Fugro swooped in on SeaBird’s seismic unit, PGS shares dropped as much as 8 percent.
The business acquired by Fugro uses so-called ocean bottom node (OBN) technology, which allows repeated monitoring of field reservoirs during production, by placing seismic receptors on the seabed instead of dragging them behind boats.
Data received is then transformed into seismic maps showing the location and behaviour of oil or gas reservoirs over the lifetime of the field.
UNEXPLORED AREAS
Fugro specialises in surveys for marine construction and offshore exploration and tends to benefit from consistently high energy prices, which encourage oil majors to spend more on searching for reserves in unexplored areas such as off the coast of Africa.
“Overall investors would have preferred Fugro to expand in the geotechnical rather than the geoscience arena,” said Royal Bank of Scotland analyst Wim Gille.
Geotechnical services are used to support the construction of infrastructure projects and oil and gas facilities, whereas geoscience products are associated with collecting and managing geophysical and geological data.
Fugro said it had already acquired 11 percent of the two SeaBird companies which own OBN rights and assets. The acquisition of the entire OBN business, valued at $125 million on a cash and debt-free basis, is expected to be signed on Oct. 31, SeaBird said.
If the deal falls through, SeaBird said it would be obliged to buy back the 11 percent stake in the OBN business at the same price and conditions: if it failed to do so, Fugro would have a claim on the remaining 89 percent.
In August, India’s Oil and Natural Gas Corporation awarded a $40 million OBN contract to SeaBird, which in its latest financial results called the OBN market “still immature”, adding that it expected it to mature through 2012 and beyond. ($1 = 5.871 Norwegian Krones)
