EMGS acquires rights to shallow water technology

Electromagnetic Geoservices?(EMGS) has acquired the exclusive worldwide rights to patented electromagnetic (EM) technology developed by KMS Technologies (Houston) that broadens its ability to support oil and gas exploration companies searching for new reserves in shallow waters.

The KMS technology offers an alternative to EMGS proprietary methodologies in shallow water applications, significantly broadening the product offering for oil companies.?To acquire these proprietary rights, EMGS has teamed with?Reservoir Exploration Technology?(RXT) to jointly acquire KMS Technologies in a 50:50 joint venture.

Earlier this year RXT signed an agreement with KMS Technologies for exclusive rights to its cable-based seafloor EM technology. RXT will retain these rights. EMGS will have exclusive rights for KMS Technologies’ time-domain, node-based system (tCSEM), which fits well with EMGS’s existing survey equipment.

“KMS’s tCSEM technology is a significant new development since EMGS invented the EM technique. Through the acquisition of KMS Technologies, EMGS improves the mix of products that we can offer to our clients. The add-on benefit for the industry has already been proven through use of the technologies of EMGS and KMS in a survey in Egypt for a major energy companies,” said EMGS chief executive officer Terje Eidesmo.

“Deepwater electromagnetic imaging continues to improve discovery rates and reduce finding costs for our customers in frontier and mature regions. KMS Technologies’ new time-domain system is an important development in electromagnetics,” said Mr Eidesmo. “The integration of this technique alongside existing EM systems will broaden our portfolio and extend the range of benefits we can deliver to customers. This will further strengthen EMGS’s position,” he concluded.

EMGS will pay US$10 million in EMGS shares and US$7 million in cash for its 50 per cent stake in KMS and the rights to the node-based tCSEM technology. In addition, EMGS will pay US$11 million over 12 years in royalty payments to KMS, and an incremental US$3 million in retention-oriented compensation for KMS’s scientific team. OSJ