Ocean bottom node seismic survey company Magseis Fairfield has agreed to buy Carbon Transition's proprietary node-on-a-rope handling systems in a deal that could see Carbon Transition earn $12 million.
Magseis Fairfield will pay an initial USD 0.5 million and enter a profit-sharing model with the seller for surveys executed with this equipment over the coming three years.
Carel Hooijkaas, Magseis Fairfield CEO said: "We see an increasingly optimistic outlook for a market recovery for OBN services in 2022 and beyond, and with this acquisition, we are further consolidating the market with a minimal upfront payment. In a global environment with significant supply chain delays this asset purchase gives us a time-to-market advantage to capture project opportunities.
"This acquisition adds to our delivery capability in the mid-water-depth market, and we improve our competitive situation in this market segment. The deal structure limits our financial risk and gives us the ability to deploy additional capacity quickly as the market continues to improve."
The transaction is structured based on an earn-out model over a three-year period conditional upon the utilization of the equipment acquired. Earn-out payments are capped at a maximum of USD 12.0 million and have a minimum payment of USD 1.5 million, subject to certain milestones.
The node handling systems Magseis Fairfield will acquire are currently installed on two Havila vessels with an additional system onshore and have previously been used for Carbon Transition’s large survey for ONGC in India and other Carbon Transition surveys in the Middle East and North Sea.
Oslo-listed company Carbon Transition in 2021 changed its name from AxxisGeo Solutions to reflect a change in its focus from being an offshore seismic survey and data firm to becoming an investment firm with a focus on energy transition.
In a statement announcing the sale of the node-on-a-rope business, Carbon Transition said:” In light of Carbon Transition’s new strategic direction, we believe our node on a rope operation will be more optimally utilized as a part of the Magseis Fairfield system and thereby maximize the market potential of the node on a rope equipment.”
"The sale does not include the multiclient business of Carbon Transition and the company thereby retains the full upside of the Utsira and the Gulf of Suez multiclient surveys. As evident through recently announced multiclient sales to several parties, the market for our multiclient library has significantly improved the last few months and we expect significant cash flow from this asset going forward."
"Following the sale of the node on a rope business, Carbon Transition will be a company with low cash burn and financial investments in attractive businesses. The sale will allow the company to fully focus on maximizing returns from the attractive multiclient library in tandem with growing its presence in the energy transition space."