Calgary-based Pulse Seismic is more than doubling the size of its library of oil and gas seismic data through the acquisition of Seitel Canada.
The new assets increase Pulse’s 3D library to approximately 65,310 net square kilometres and its 2D library to approximately 829,207 net kilometres.
The transaction includes $53.6 million paid at closing this week, plus up to $5 million over the next two years based on 50 percent of cash resales generated from the acquired data.
The seismic covers key plays in Western Canada including the Montney, Cardium, Viking, Horn River, Duvernay, Bluesky and Bakken.
“While Pulse’s short-term outlook for business conditions remains cautious, with a lack of visibility for sales over the next several quarters, the Seitel acquisition is a strategic move designed to position Pulse for long-term success through growth in its data library,” CEO Neal Coleman said in a statement.
“Approximately doubling the size of our database also increases the statistical likelihood of some sales from our greatly expanded data library.”
Houston-based Seitel says that with the sale it is now able to focus on the U.S. oil and gas market.
“Although it is difficult to exit a business that has been part of our history for so many years, we are pleased to have gained financial flexibility, which will allow us to focus our capital investment on our core U.S. library that we believe will deliver the greatest value to our clients,” said CEO Rob Monson.
Seitel says that in 2018 its Canadian seismic data library contributed approximately $4.2 million to its cash resales and approximately $7.1 million to its total revenue.
Pulse reported $5.9 million in data sales for the nine months ended September 31, 2018.