PGS sells Atlantis unit to Sinochem

Jan 24, 2003 01:00 AM

Petroleum Geo-Services (PGS) revealed that it has agreed to terms and signed an amendment to its agreement with Sinochem (China National chemicals Import & Export Corporation) for the sale of its Atlantis subsidiary.
PGS said that the amendment provides waivers of all conditions precedent in the previous agreement, with the consequence that there are no further material conditions to be fulfilled prior to closure. Under the terms of the revised agreement the gross proceeds of the transaction total up to $ 105 mm, of which approximately $ 55 mm will be paid upon closure, at which time the ownership of Atlantis shares is transferred to Sinochem. The agreement provides for additional payments of up to $ 50 mm, subject to completion and terms of certain sales contracts.

The London-based Atlantis subsidiary is staffed primarily with reservoir engineers, geologists, and geophysicists, who provide technical consulting services, reservoir studies, enhanced recovery services, prospect identification,seismic data interpretation, seismic data reprocessing services, and other geophysical services in exchange for cash or other compensation, including interests in oil and gas properties or concessions.
The subsidiary was established by PGS in 1995 and subsequently acquired several offshore concessions off the UAE and Tunisia. The company carried out extensive 3D seismic over these properties and in association with partners, drilled several exploratory wells as required by the licenses, confirming more than 500 bn cf of proven and probable gas reserves off the UAE and more than 20 mm barrel of proven and probable oil reserves offshore Tunisia and the UAE.

The company signed agreements to develop and sell the gas found off the UAE and had commenced development, which was expected to begin production early this year. In Tunisia, Atlantis and its partner drilled three wells in the Isis Field and leased the Ikdam FPSO to produce the reserves from the field.
The Atlantis unit was thought to be worth about $ 200 mm. The company's inability to close the sale last year was considered the primary stumbling block in PGS' failed merger with Veritas DGC.

Source: OGI
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