Geoscience player CGG has agreed to sell off its shares in Shearwater GeoServices to Norway’s Rasmussengruppen.

CGG revealed Eidesvik Offshore had exercised a put option on Monday and sold all of its Shearwater shares to CGG at a strike price of $30 million, taking CGG’s shareholding in Shearwater to 6.64% of the total outstanding shares and 6.72 % of the shares having voting rights.

CGG has accepted a binding offer from Rasmussengruppen to acquire all of its Shearwater shares, including those it is set to acquire from Eidesvik.

It has agreed to sell the shares to Rasmussengruppen for $27.6 million, which it deemed to be a “fair market value”, with the deal expected to close no later than 1 February.

Strong end to challenging year

The news of the Shearwater share deals came as CGG also revealed on Tuesday that it anticipates strong revenues for the final quarter of 2020, but full-year revenues are expected to be lower year-on-year.

CGG revealed in a financial update on Tuesday that fourth-quarter revenues are expected to total $282 million, up 42% on the prior quarter.

This is due to an anticipated 115% rise in equipment segment sales, to about $106 million, and an expected 38% jump in multi-client segment sales, to $101 million, more than offsetting an anticipated 3% drop in geoscience segment revenue.

The final quarter also saw growth in CGG’s backlog, which stood at $421 million on 1 January, its highest level since 1 April 2020.

While the company is forecasting a strong end to 2020, overall revenues for the year are anticipated to be down 32%, compared to 2019.

CGG also warned that it anticipates negative net cash flow of about $245 million for 2020, mainly due to a significant negative change in working capital and non-recurring cash costs, including severance pay.

The company will announce its full fourth-quarter results on 5 March.

PGS also gives signals for strong fourth quarter

CGG’s financial update came as another seismic player, PGS, posted its quarterly update on Tuesday, anticipating a rise in revenues, to $158 million, for the final three months of 2020.

"We achieved a sequential revenue increase from our vessel operations in the fourth quarter, and a multi-client pre-funding level benefitting from additional sales from ongoing surveys,” chief executive Rune Olav Pedersen said.

“Our multi-client late sales more than doubled, compared to the average in the previous three quarters of the year. The drivers for the increased late sales were a mix of the usual seasonal fourth-quarter increase and sales relating to licensing rounds in West Africa and Brazil.”

PGS will release its fourth-quarter and preliminary full-year 2020 financial statements on 4 February.

Finance

Geoscience player CGG sells Shearwater shares