A&M frenzy hits upstream

High oil prices and a strong service sector bring a spate of upstream acquisitions. Beside the big one, CGG’s $3 billion acquisition of Veritas, this month sees multiple software and services acquisitions.

With the oil service sector booming, it’s time to buy! US-based Geotrace has snapped up UK upstream software house Tigress Geosciences. Roxar, flush with Middle East petro dollars has acquired Energy Scitech. Geokinetics has finished its purchase of Grant Geophysical. And then there is the big one—the top dollar take-over of Veritas by CGG.


Seismic processing house Geotrace has extended its portfolio into the acquisition space with its purchase of the Tigress subsurface data integration suite. Geotrace CEO Bill Schrom said, ‘The Tigress geoscience applications along with our seismic imaging technology represent the most integrated solution available to the industry.’


Roxar’s acquisition of Energy Scitech is its first since it was acquired by Arcapita Bank. Roxar will now offer clients Energy Scitech’s history matching product EnABLE alongside its IRAP RMS reservoir modeler and its Tempest fluid flow simulator. The combined offering is claimed to be the first commercial solution which allows simultaneous modeling of multiple geological scenarios and fluid flow models. Energy Scitech MD Bob Parish said, ‘To grow and expand our capabilities, we needed the support of a larger company with complementary technology and international support.’


Geokinetics has completed its purchase of Grant Geophysical, a $125 million cash transaction financed by Avista Capital Holdings and Royal Bank of Canada. Geokinetics president and CEO, Dave Johnson said, ‘This represents our second significant acquisition (after Trace Energy) during the last 12 months. We are now one of the largest land, transition zone and shallow water acquisition companies in the world.’


Compagnie Générale de Géophysique (CGG) is to acquire Veritas DGC in a cash and paper transaction valued at approximately $3 billion, a 35% premium over Veritas’ prior share price. The combined group will operate under the name ‘CGG-Veritas’ and will remain a ‘pure play’ seismic company boasting a fleet of 20 vessels, including 14 high capacity 3D vessels, and land crews around the world. The new group will have a combined workforce of approximately 7,000 staff.


Veritas chairman and CEO Thierry Pilenko is to serve on the new board of directors under chairman, Robert Brunck. Credit Suisse and Rothschild acted as financial advisors to CGG and Goldman Sachs was financial advisor to Veritas. CGG’s presentation to analysts claims the timing of the deal was ‘ideal in the cycle’. With oil at a six-month low this looks more like buying at the peak!!

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