EMGS Inks 3D EM Data Sale Agreement with North Energy

Electromagnetic Geoservices ASA (EMGS) has signed an agreement with North Energy ASA (North Energy) worth NOK 100 million (USD 16.1 million).

The agreement includes a sale of 3D EM data from EMGS’ existing multi-client data library in the Barents Sea for USD 12.1 million and sale of services related to EM inversion and integrated interpretation for USD 2.4 million. In addition, North Energy has committed to pre-funding of USD 1.6 million for a 2014 Barents Sea program.

The payment for the 3D EM data will be in the form of a convertible bond issued by North Energy with a strike price of NOK 4.15, coupon of 6% and with a maturity of 6 months. At maturity, if not converted before, EMGS will receive NOK 75 million (USD 12.1 million) plus interest. The remaining part of the payment of NOK 25 million (USD 4.1 million) will be settled in cash.

This multi-client sale confirms the substantial value in our 3D EM library in the Barents Sea. We are also encouraged by the fact that we are now entering into a strategic partnership with North Energy where the application of EM technology will be an integral part of their exploration workflow,” says CEO of EMGS, Roar Bekker.

EMGS will participate with NOK 20 million (around USD 3.2 million) in the private placement in North Energy totaling NOK 285 million.

“This investment strengthens our partnership with a key customer and enables us to further harvest on our technology by participating in the value creation from integration of EM in the exploration workflow. We are also pleased to note that the completion of North Energy’s private placement render them fully financed for a substantial exploration program,” says Bekker.

The agreement is subject to approval of the Extra Ordinary General Meeting (EGM) in North Energy scheduled for 13 February.

Press Release, January 21, 2014; Image: EMGS

 

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