Paradigm has agreed in principle to acquire CGG’s Flagship Geosciences software subsidiary for 1.5 million Paradigm shares and $4 million in cash. CGG’s new stake in Paradigm represents approximately 11% of the company. Under the agreement Paradigm would acquire Flagship’s StratiMagic seismic characterization application and the Integral Plus interpretation suite.
CGG and Paradigm plan to cooperate in the future on interpretation software development. CGG boss Robert Brunck said "Combining Paradigm and Flagship operations will provide our customers with a wider range of reservoir management software, while Flagship personnel will have enhanced opportunities for development."
Paradigm chairman Eldad Weiss added "We very much welcome CGG as a strategic partner in Paradigm. Incorporating Flagship complements our product offerings and adds both a staff skilled in reservoir characterization solutions and a strong management team. We look forward to integrating the Flagship and Paradigm operations."
The agreement is subject to satisfactory due diligence, execution of definitive agreements and regulatory approvals. The companies expect to close the transaction and to transfer operations in the third quarter of 2000.
StratiMagic adds sophisticated seismic characterization to Paradigms’s reservoir characterization suite. But the synergy between Integral Plus and the other pieces of Ergos (notably Seis-X) is less obvious. However Integral Plus does add a cross discipline database which may add value to the rest of Paradigm’s interpretation tools. Both companies are enthusiastic users of CORBA to integrate the major E&P platforms.
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