Earth Decision, vendor of the GOCAD geomodeling package, has been the object of intense speculation for some time with strong rumors of a aborted sale to Halliburton earlier this year. Paradigm CEO John Gibson has put an end to the rumors with the announcement of a definitive agreement to acquire Earth Decision for an undisclosed sum.
Gibson
Gibson said, ‘Given our vision for model-centric workflows, this acquisition represents a tremendous advantage for E&P scientists and engineers. For collaboration and real time decision making, our customers need an interactive reservoir model at the center of their workflow. By combining our complementary technology portfolios this vision becomes a reality. Asset teams can explore ‘what if’ scenarios on-the-fly and determine the best plan for extracting the full potential from every reservoir safely and economically.’
Mallet
GOCAD, Earth Decision’s flagship, is developed by a consortium led by the National School of Geology (ENSG) in Nancy, France, directed by Professor Jean-Laurent Mallet whose ‘discrete smooth interpolation’ technique is the lynchpin of the modeling engine. In 1998, the Consortium gave Earth Decision an exclusive license for the GOCAD’s commercialization. The Consortium now develops prototype GOCAD plug-ins, while Earth Decision assures the maintenance, development and commercialization of the ‘official’ software kernel.
Combined
The combined company will be called Paradigm and Gibson will remain Chairman and CEO. Paradigm expects to maintain Earth Decision’s global office network and does not expect significant workforce reductions.
GeoDepth
Paradigm’s developers will have their work cut out integrating GOCAD with VoxelGeo and GeoDepth. Especially as they are already hard at work plugging Epos into Open Spirit (OS). But as OS president Dan Piette told Oil IT Journal, ‘A strong third player in E&P software is good for everyone, including OS!’
Fox Paine
Paradigm was acquired by San Francisco-based private equity house Fox Paine back in 2002 in a $100 million cash transaction (OITJ Vol. 7 N°5). Since then, the Philadelphia Oil Service Sector index has almost tripled. With the industry riding high, could it be time for an IPO?
Comment
This is yet another example of how Europe does a great job of developing cutting-edge software, but falls short on venture financing. The EU taxpayer pays (at least in part) for the R&D, and a Californian venture capital fund reaps the lion’s share of the rewards!
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