CGGVeritas to Buy Norway's Wavefield for $310 Million

By Tara Patel and Vibeke Laroi

Nov. 10 (Bloomberg) -- CGGVeritas, the world's largest seismic surveyor, agreed to buy Norway's Wavefield Inseis ASA for about $310 million to expand its fleet as explorers boost spending on field data to increase reserves.

The Paris-based surveyor offered one new share for seven Wavefield shares, representing a price of 15.9 kroner ($2.35) apiece, a 31 percent premium from the close of trading on Nov. 7, CGGVeritas said today in a statement. Wavefield said its board ``unanimously welcomes'' the bid.

``The transaction strengthens CGGVeritas's high-end fleet capability with immediate access to five recently equipped high capacity three-dimensional vessels,'' the French company said. Wavefield, the oil-field surveyor previously targeted by TGS- Nopec Geophysical Co., has a contract backlog of $485 million, or about one year of its revenue.

CGGVeritas rose as much as 14 percent to 14.48 euros in Paris trading, and was at 14.28 euros as of 11:17 a.m. local time. Wavefield climbed as much as 38 percent to 16.8 kroner, the biggest jump since starting to trade in Oslo in November 2006. The stock was at 16.4 kroner as of 11:18 a.m., valuing the Lysaker-based company at 2.12 billion kroner ($310 million).

Wavefield Technology

Oil and gas surveyors are merging to offer clients a wider range of services as reserves become more difficult to reach and more costly to exploit. CGGVeritas will get access to Wavefield's so-called wide azimuth technology, which shoots seismic data from various directions, and to electromagnetic and fiber-optic equipment that helps producers define the structure and content of reservoirs.

Schlumberger Ltd., the world's largest oil-services provider, agreed in 2006 to buy Baker Hughes Inc.'s stake in their WesternGeco venture, which maps oil reservoirs, and offered last year to acquire Eastern Echo Plc to add seismic vessels.

Petroleum Geo-Services ASA, the third-biggest oil-field surveyor, agreed last year to buy Edinburgh-based MTEM Ltd. for $275 million to add electromagnetic-surveying assets.

CGGveritas was created in 2006 when Massy, France-based Compagnie Generale de Geophysique SA bought Houston-based Veritas DGC Inc.

``The board believes it's of good quality and will ask shareholders to evaluate the bid,'' Wavefield Chief Executive Officer Atle Jacobsen said in a telephone interview today. Wavefield hasn't received rival bids, he added.

`Low' Premium

``The offer premium of 31 percent seems low,'' John Olaisen, an analyst at Carnegie ASA, said today in a note to clients. ``It is not a cash offer but CGGVeritas shares, which seems expensive.'' Carnegie has an ``underperform'' rating on CGGVeritas and rates Wavefield stock ``outperform.''

Last year's proposed takeover of Wavefield by larger Norwegian competitor TGS fell through after Wavefield shareholders voted in January to cancel the 5 billion-kroner offer. TGS, which had sought as much as $550 million in compensation for the failed bid, said today that the companies have settled the dispute and agreed to waive all claims. TGS jumped 13 percent to 43.4 kroner at 11:26 a.m. in Oslo.

CGGVeritas was advised by Credit Suisse Group. The company won't cut jobs under the takeover plan, CEO Robert Brunck said on a conference call. ``There is a job for everyone,'' he said.

To contact the reporters on this story: Tara Patel in Paris at tpatel2@bloomberg.net; Vibeke Laroi in Oslo at vlaroi@bloomberg.net