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file | filename |
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8-K - FORM 8-K - ION GEOPHYSICAL CORP | h71863e8vk.htm |
EX-10.1 - EX-10.1 - ION GEOPHYSICAL CORP | h71863exv10w1.htm |
EX-10.5 - EX-10.5 - ION GEOPHYSICAL CORP | h71863exv10w5.htm |
EX-10.3 - EX-10.3 - ION GEOPHYSICAL CORP | h71863exv10w3.htm |
EX-10.2 - EX-10.2 - ION GEOPHYSICAL CORP | h71863exv10w2.htm |
EX-10.4 - EX-10.4 - ION GEOPHYSICAL CORP | h71863exv10w4.htm |
EXHIBIT 99.1
ION and BGP Announce Successful Completion of Land Seismic Joint Venture
INOVA Geophysical Established as a Leading Seismic Technology Company
INOVA Geophysical Established as a Leading Seismic Technology Company
HOUSTON March 29, 2010 ION Geophysical Corporation (NYSE: IO) today announced that it has
successfully completed the previously announced land seismic equipment joint venture with BGP Inc.,
the worlds leading land seismic contractor. Originally announced at the Society of Exploration
Geophysicists (SEG) annual conference in October 2009, the joint venture transactions received all
necessary government and regulatory approvals in both the United States and the Peoples Republic
of China. Definitive agreements associated with the joint ventures formation and other related
transactions were executed by senior executives of ION and BGP late last week in Beijing.
The joint venture company, named INOVA Geophysical Equipment Limited, will offer a comprehensive
portfolio of advanced geophysical technologies used in oil and gas exploration to land seismic
service providers around the world. Offerings include energy source and source control systems,
land seismic recording systems, and digital full-wave seismic sensors. Initial products to be
marketed by INOVA include Aries®, FireFly®, and Scorpion®
acquisition systems; AHV-IV® Vibroseis vehicles; ShotPro® and
VibPro® source control systems; and VectorSeis®. INOVAs seven-member Board
of Directors appointed Mr. Steven A. Bate, formerly Senior Vice President of IONs Land Imaging
Systems group, as President and Chief Executive Officer of the company.
Bob Peebler, Chief Executive Officer of ION, commented, The formation of INOVA marks a key
milestone in IONs corporate history. If one were to trace back the roots of all of the
predecessor companies that today comprise ION Geophysical, the root that would extend the longest
is the one associated with land seismic instrumentation. For nearly forty years, ION has been
known as a pioneer in land seismic technology, having brought to the market game-changing
innovations such as full-wave imaging, VectorSeis, and FireFly. By combining forces with the
worlds largest land seismic contractor, we will be providing INOVAs technical team with direct
access to the expertise, insights, and global operating footprint they require to design and
deliver geophysical instruments that are the most reliable, efficient, and cost effective in the
marketplace. Steve has a good sense of what is needed to be successful in this business, and he is
the right executive to guide INOVA to success in the years ahead. I wish him the best.
The information included herein contains 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.
Actual results may vary fundamentally from those described in these forward-looking statements. All
forward-looking statements reflect numerous assumptions and involve a number of risks and uncertainties.
These risks and uncertainties include risk factors that are disclosed by ION from time to time in its filings
with the Securities and Exchange Commission.
INOVA is now owned 51% by BGP Inc., a subsidiary of China National Petroleum Corporation (CNPC),
and 49% by ION Geophysical Corporation. As previously agreed, BGP paid $108.5 million to ION to
purchase its 51% share of INOVA. In addition, ION issued approximately 23.8 million shares of ION
common stock to BGP for a purchase price of $66.6 million; BGP now owns approximately 16.66% of
IONs outstanding shares of common stock.
As a result of the JV and stock purchase transactions, ION received a total of approximately $175
million in cash from BGP. ION applied $118 million of the proceeds to pay in full all outstanding
amounts owed to its creditors under its revolving line of credit agreement. ION also applied $35
million of the proceeds to pay in full all amounts owed to the seller of ARAM from the purchase
made in September 2008. ION also transferred $19 million of debt secured by ARAM rental equipment,
along with $2 million in capital leases, to the joint venture.
In addition, ION has entered into a new credit agreement with China Merchants Bank Co., Ltd. that
both refinanced all amounts outstanding under IONs current Term A long-term debt (totaling
$106.3 million) and provided ION with a new $100 million revolving line of credit, in each case on
improved terms and conditions.
Bob Peebler added, By forming this JV, selling equity to our strategic partners, and refinancing
our debt, ION has significantly deleveraged its balance sheet. After paying down our previous
revolver and the ARAM seller note, we netted approximately $20 million in cash from this series of
transactions. When this $20 million is combined with the $100 million line and zero balance on
our new revolver from China Merchants Bank, ION will have roughly $120 million in liquidity to tap
into when and if needed. This will allow us to sustain our ongoing investments in new geophysical
technologies in the years ahead. As the global economy continues to strengthen, commodity prices
improve, and our customers increase their capital spending on exploration and reservoir
characterization services, we believe our portfolio of advanced geophysical offerings will prove
highly attractive in the marketplace.
As part of the overall agreement between ION and BGP, ION will be adding an additional member to
its Board of Directors. Mr. Guo Yueliang, Vice President of PetroChina Iraq, has been nominated
to fill the new Board seat. Once approved by IONs current directors in April, Mr. Guo will become
the tenth Director on IONs Board.
The information included herein contains 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. Actual
results may vary fundamentally from those described in these forward-looking statements. All forward-looking
statements reflect numerous assumptions and involve a number of risks and uncertainties. These risks and uncertainties
include risk factors that are disclosed by ION from time to time in its filings with the Securities and Exchange Commission.
Bob Peebler closed by saying, Mr. Guo played an instrumental role in the INOVA transaction.
Before being promoted into his current position at CNPCs PetroChina subsidiary, Mr. Guo served as
VP, International for BGP. He has worked in the seismic business for nearly thirty years and
contributed greatly to BGPs global expansion and operational success in recent years. Mr. Guo
understands what geophysical service providers expect from technology developers like ION and will
contribute a valuable and complementary perspective as a member of IONs Board of Directors. His
vision for the INOVA joint venture and tireless efforts in helping us get the transaction over the
goal line have helped position both ION and INOVA for future success.
About ION
ION Geophysical Corporation is a leading provider of geophysical technology, services, and
solutions for the global oil & gas industry. IONs offerings allow E&P operators to obtain higher
resolution images of the subsurface to reduce the risk of exploration and reservoir development,
and enable seismic contractors to acquire geophysical data more efficiently. Additional
information about ION is available at www.iongeo.com.
Contacts
ION (Financial community)
Chief Financial Officer
Brian Hanson, +1 281.879.3672
Chief Financial Officer
Brian Hanson, +1 281.879.3672
ION (Media affairs)
Director Corporate Marketing
Karen Abercrombie, +1 713.366.7281
karen.abercrombie@iongeo.com
Director Corporate Marketing
Karen Abercrombie, +1 713.366.7281
karen.abercrombie@iongeo.com
# # #
The information included herein contains 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.
Actual results may vary fundamentally from those described in these forward-looking statements. All forward-looking statements reflect numerous
assumptions and involve a number of risks and uncertainties. These risks and uncertainties include risk factors that are disclosed by ION from
time to time in its filings with the Securities and Exchange Commission.