Geokinetics Completes Acquisition of the Onshore Seismic Business of Petroleum Geo-Services
February 15 2010 - 2:00AM
PR Newswire (US)
HOUSTON, Feb. 15 /PRNewswire-FirstCall/ -- Geokinetics Inc. (NYSE
Amex: GOK) announced today that it has completed its acquisition of
Petroleum Geo-Services' ("PGS") onshore seismic data acquisition
and multi-client data library business ("PGS Onshore"). "The
combination of PGS Onshore and Geokinetics solidifies our position
as the clear leader in the onshore seismic data acquisition
business," said Richard F. Miles, President and Chief Executive
Officer of Geokinetics. "It not only brings together two strong
complementary seismic data acquisition operations, but it also
accelerates our strategic initiatives in the multi-client library
business." "We are pleased to welcome the management and employees
of PGS Onshore to our team and look forward to providing our
customers worldwide with an expanded array of best-in-class
services and data," said Miles. The purchase price paid by
Geokinetics at closing was $210 million, on a cash free, debt free
basis, less a $2.8 million adjustment for estimated net working
capital below the included amount of $37.5 million. The purchase
price is subject to certain additional working capital adjustments
after closing. Geokinetics has funded this acquisition through a
combination of cash and common stock. At closing, Geokinetics
issued PGS approximately 2.15 million shares, which represented
19.9% of Geokinetics shares outstanding prior to the signing of the
purchase agreement, valued for purposes of the transaction at
$12.11 per share, or $26.1 million. This amount represents 12% of
the Company's current common shares outstanding. The remainder of
the purchase price, or $183.9 million, was paid in cash.
Geokinetics used a portion of the net proceeds from a $300 million
senior secured notes offering and a $37 million equity offering
completed in December 2009 to finance the cash portion of the
acquisition, repay current outstanding indebtedness and for general
corporate purposes. Operationally, Geokinetics' backlog declined to
$190 million as of December 31, 2009, which has and will continue
to impact the Company's operations in the near-term. Including PGS
Onshore's backlog, the Company's pro-forma backlog was $378 million
as of December 31, 2009. "In the prevailing climate of general
economic uncertainty, our customers are being cautious and are
taking longer than normal to award projects. We have numerous bids
still outstanding, especially in our high value OBC market, that
were bid mid to late last year. However, bid activity is increasing
and we remain optimistic that as customer confidence returns, we
will see significant awards in the coming months. In January, we
completed our large OBC project in Angola that we started in the
fourth quarter of 2008 and are currently demobilizing that crew
while awaiting follow-on work," concluded Miles. In addition to the
above, the Company is providing a summary of changes in its common
stock below. Changes in Common Stock The Company is providing this
update to assist shareholders in understanding recent changes to
the Company's common stock outstanding as well as changes resulting
from the closing of the PGS acquisition. The following is a summary
of significant transactions that involved the issuance of the
Company's common stock. All amounts are approximate. Common stock
outstanding prior to recent significant transactions 10.8 million
Common stock issued through public offering on December 18, 2009
4.0 million Common stock issued in connection with restructuring of
preferred stock on December 18, 2009 0.8 million Common stock
issued through exercise of over-allotment option on January 14,
2010 0.2 million Common stock issued to PGS in connection with
purchase of PGS Onshore on February 12, 2010 2.2 million
----------- Common stock outstanding subsequent to recent
significant transactions 18.0 million ABOUT GEOKINETICS Geokinetics
Inc., based in Houston, Texas, is a leading global provider of
seismic acquisition and high-end seismic data processing services
to the oil and gas industry. Geokinetics has strong operating
presence in North America and is focused on key markets
internationally. Geokinetics operates in some of the most
challenging locations in the world from the Arctic to mountainous
jungles to the transition zone environments. For more information
on Geokinetics, visit http://www.geokinetics.com/. Forward-Looking
Statements This press release includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All statements, other than statements of
historical facts, included in this earnings release that address
activities, events or developments that Geokinetics expects,
believes or anticipates will or may occur in the future are
forward-looking statements. These statements include but are not
limited to statements about the business outlook for the year,
backlog and bid activity, business strategy, related financial
performance and statements with respect to future events. These
statements are based on certain assumptions made by Geokinetics
based on management's experience and perception of historical
trends, industry conditions, market position, future operations,
profitability, liquidity, backlog, capital resources and other
factors believed to be appropriate. Such statements are subject to
a number of assumptions, risks and uncertainties, many of which are
beyond the control of Geokinetics, which may cause actual results
to differ materially from those implied or expressed by the
forward-looking statements. These include risks relating to
financial performance and results, job delays or cancellations,
reductions in oil and gas prices, the continued disruption in
worldwide financial markets, impact from severe weather conditions
and other important factors that could cause actual results to
differ materially from those projected, or backlog not to be
completed, as described in the Company's reports filed with the
Securities and Exchange Commission. Backlog consists of written
orders and estimates of Geokinetics' services which it believes to
be firm, however, in many instances, the contracts are cancelable
by customers so Geokinetics may never realize some or all of its
backlog, which may lead to lower than expected financial
performance. Although Geokinetics believes that the expectations
reflected in such statements are reasonable, it can give no
assurance that such expectations will be correct. All of
Geokinetics' forward-looking statements, whether written or oral,
are expressly qualified by these cautionary statements and any
other cautionary statements that may accompany such forward-looking
statements. Any forward-looking statement speaks only as of the
date on which such statement is made and Geokinetics undertakes no
obligation to correct or update any forward-looking statement,
whether as a result of new information, future events or otherwise.
Contact: Scott A. McCurdy Vice President and CFO Geokinetics Inc.
(713) 850-7600 DATASOURCE: Geokinetics Inc. CONTACT: Scott A.
McCurdy, Vice President and CFO of Geokinetics Inc.,
+1-713-850-7600 Web Site: http://www.geokinetics.com/
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