About CGG

CGG provides data acquisition, processing and interpretation services to clients in the oil and gas exploration and production business. The company also offers related imaging and interpretation software. The company is also a manufacturer of geophysical equipment worldwide. Segments The company operates through Equipment, Contractual Data Acquisition (which includes Marine Acquisition, Land Acquisition and Multi-Physics), and GGR (Geology, Geophysics & Reservoir) (which includes Multi-Client and New Ventures (MCNV), Subsurface Imaging, GeoSoftware and GeoConsulting). Equipment segment This segment conducts the equipment development and production operations through Sercel and its subsidiaries. Sercel engages in the development and production of seismic equipment in the land and marine seismic markets. Sercel makes majority of its sales to purchasers other than the company. As of December 31, 2017, Sercel operated six seismic equipment manufacturing facilities, located in Nantes and Saint Gaudens in France; Houston and Tulsa in the U.S.; Krimpen aan de Lek in The Netherlands; and Singapore. In China, Sercel operates through Hebei Sercel-JunFeng Geophysical Prospecting Equipment Co. Ltd. (Sercel-JunFeng), based in Hebei, in which Sercel has a 51% equity stake. In addition, two sites in Toulouse and Brest (France) are dedicated to borehole gauges and submarine acoustic instrumentation, respectively. Sercel sells its equipment and offers customer support services, including training on a worldwide basis. Sercel offers a range of geophysical equipment for land or marine seismic data acquisition, including seismic recording equipment, software and seismic sources either for land (vibrators) or marine (air guns). Sercel also supplies its clients with integrated solutions. With respect to land acquisition equipment, Sercel offers a recording system, the 508XT system, which introduces a paradigm in land seismic acquisition by offering high count channels crews the ability to record approximately one million channels in real time. The 508XT is the first member of Sercel’s new generation of land seismic acquisition systems. The 508XT has an adaptive architecture and the option of mixing various communication media (cable, radio, and fiber-optic) to form a network allowing the user to define data routing and avoid obstacles in the field. Sercel provides QuietSeis, a digital sensor based on next-generation MicroElectroMechanicalSystems, allowing seismic signals to be recorded with three times less instrument noise than before. The 508XT architecture combines cabled and wireless technologies. In June 2017, Sercel announced the launch of a new node, the WTU-508, which is integrated into the existing 508XT platform. This new product offers flexibility for various types of survey operations, such as small-scale urban surveys or high-productivity mega-crews. The WTU-508 also features Sercel’s XT-Pathfinder transmission management technology, which provides quality control information to the land seismic recorder wirelessly and without the need for any additional infrastructure. Sercel’s vibrator family, Nomad, is available with either normal tires or a tracked drive system. The track drive system allows Nomad vibrators to operate in terrain not accessible to vehicles with tires. As of December 31, 2017, approximately 1,160 Nomad 65 were delivered since its market introduction. Sercel also offers the Nomad 90, which is capable of exerting a peak force of 90,000 pounds. The Neo version of the Nomad 65 and 90 allows the generation of a range of seismic wave frequencies and is a facilitator for broadband seismic land surveys and adds new functionalities. In addition to recording systems and vibrators, Sercel develops and produces a range of geophysical equipment for seismic data acquisition and other ancillary geophysical products, such as geophones, cables and connectors. Sercel also offers the SG5 geophone featuring a low natural frequency. In the down-hole domain, Sercel offers its VSP tool, MaxiWave. The Geowave II is a digital multilevel borehole tool primarily designed for high temperature, high pressure wells. In 2013, Sercel introduced the Sentinel MS, a Sentinel with multi-sensors together with two additional acceleration components, providing directive measurement for cross line and vertical wave front. This streamer technology delivers multi-sensors data sets for broadband imaging. In 2017, Sercel improved its cables offer with the Sentinel HR, a high-resolution solid streamer designed to meet the specific imaging needs of shallow-target applications, such as oceanology, civil engineering and reservoir characterization, as well as high-resolution 3D seismic surveys for mapping of geological features. The marine range of products has been further improved with the SeaProNav, a navigation software allowing the real-time positioning of streamers; the Nautilus, an integrated system for positioning seismic streamers; and QuietSea, a passive acoustic monitoring system for detecting the presence of marine mammals during marine seismic surveys. The SeaRay is an ocean bottom cable offered under various configurations for depth of 100 to 500 meters. This cable is based on the 428 family acquisition systems technology and allows multi-components recording owing to its DSU 3 components. In 2015, Sercel launched the GeoTag product, an acoustic solution for seabed seismic acquisition approximately 500 meters depth. Sercel has also, in November 2017, entered into a partnership with the U.K.-headquartered Fotech Solutions to jointly develop a future borehole seismic solution combining electronics and distributed acoustic sensing (DAS) technology. Within the partnership, Fotech Solutions would contribute DAS measurement solutions and Sercel would contribute downhole seismic tools and software for subsurface seismic operations. Competition The company’s major competitors for the manufacture of marine seismic equipment are Ion Geophysical Inc., Teledyne and WesternGeco, which offers its streamers for sale to third parties. For land products, the major competitors are Inova (a joint venture between BGP and Ion Geophysical Inc.), Geospace Technologies Corporation, Wireless Seismic and WesternGeco. Contractual Data Acquisition segment This segment includes the company’s geophysical acquisition services offering, including land, marine, airborne and seabed, being operated either directly or through joint ventures. Its worldwide crews operate in various environments. Marine Data Acquisition Business Line The company provides a range of marine seismic 2D and 3D services, focusing on the Gulf of Mexico, the North Sea, West Africa and Brazil, as well as the Asia Pacific region. It also delivers marine seismic contract data acquisition in ‘frontier’ areas. Maritime management of the operated fleet In December 2017, the maritime management of the seismic fleet operated by the company (Oceanic Sirius, Oceanic Vega, Oceanic Endeavour, Oceanic Champion, and Geo Coral) was managed by its joint venture ship managers CGG Eidesvik Ship Management AS. Bourbon Offshore operates six support and chase vessels (ancillary services, including refueling, food and equipment delivery, crew change, storage, assistance and support during in-sea maintenance operations, protection of streamers from interactions with third party vessels and fishing devices), designed primarily for the company, chartered individually for a minimum period of five years since their initial progressive deployment between 2013 and 2014. Ownership Status of the Fleet As of December 31, 2017, the company owned the Geowave Voyager and 50% shares in GSS, which holds 100% of the shares of the companies that own the Oceanic Sirius, Oceanic Vega, Geo Coral, Geo Caribbean, Geo Celtic, CGG Alizé and the Oceanic Challenger. As of December 31, 2017, various vessels that are either fully owned or hired under bareboat charter include the Oceanic Sirius, the Oceanic Vega and the Geo Coral were chartered bareboat by GSS or one of its subsidiaries; the Oceanic Champion was chartered bareboat from Oceanic Champion AS; the Oceanic Endeavour was chartered bareboat from Volstad Maritime DIS II AS; the Viking Vanquish was chartered bareboat from Eidesvik MPSV AS; the Oceanic Phoenix was chartered bareboat from Master and Commander AS; and the Geowave Voyager was owned by Exploration Vessel Resources II AS. Land Data Acquisition and Multi-Physics Business Lines Land Data Acquisition principally focuses on the acquisition and onsite processing of seismic data acquired on land areas. The company is a major land seismic acquisition contractors operating worldwide, primarily in desert areas, and particularly in areas requiring specific technologies, Health, Safety and Environment (HSE) excellence, qualified personnel and operational expertise. Land operations employ surveying and recording crews. Surveying crews lay out the lines to be recorded and mark the sites for shot-hole placement or recording equipment location (except for ‘stakeless’ operations where the source locations are indicated through integrated GPS capabilities rather than on location by field personnel). Operations in the Middle East are conducted in partnership with the Saudi company TAQA through the Arabian Geophysical and Surveying Company joint venture. Seabed acquisitions are operated through Seabed JV, which is owned 60% by Fugro N.V and 40% by the company. Multi-Physics Multi-Physics include the following four segments of activity and provides services worldwide: Airborne activity encompasses the collection, processing and interpretation of data related to the earth’s surface and the soils and rocks beneath, and provides advice based on the results to clients in the mineral, oil and gas, governmental, engineering and environmental management sectors. The company acquires electromagnetic, magnetic, radiometric and gravity data using fixed-wing airplanes and helicopter platforms. Helicopter projects are supported using subcontracted or chartered helicopters, as the geophysical instrument systems designed for use on helicopters could be installed without significant modifications to the aircraft. Marine activity encompasses the acquisition and data processing of marine gravity and magnetic data in conjunction with seismic surveys or on a stand-alone basis. Imaging activity involves the development and licensing of major commercial software packages for potential fields and electromagnetic modelling and inversion, as well as interpretation services provided on data collected directly by Multi-Physics or from other sources. Multi-client activity involves the licensing of data from an owned library of gravity and magnetics data covering various areas of interest for oil and gas, and minerals exploration. These services are offered on a worldwide basis. GGR segment This segment engages in various activities assisting the company’s clients in identifying their exploration targets and characterizing their reservoirs. Among these are developing and licensing multi-client seismic surveys; processing seismic data; selling seismic data processing and reservoir characterization software (primarily under the geovation, Hampson-Russell and Jason brands); providing geoscience and petroleum engineering consulting services; collecting, developing and licensing geological data (under the Robertson brand); and providing data management services and software to its clients. MCNV The MCNV business line utilizes the resources of the company’s other business lines, as well as those of sub-contractors to acquire and process seismic data for itself and license that data to its clients. MCNV operates in marine environments on a worldwide basis and on land in the United States. It has major investments in the Gulf of Mexico, offshore Brazil, the North Sea and onshore United States. As of December 31, 2017, the library of 3D seismic surveys consisted of approximately 978,000 square kilometers of marine surveys across various basins and 76,000 square kilometers of land data, primarily in the United States. Subsurface Imaging and Reservoir (SIR) Through its SIR activity, the company transforms marine and land seismic data acquired in the field into images of the subsurface that could then be used by its clients in their efforts to find and produce oil and gas. These images provide a means to understand the structure of the subsurface, as well as deduce various qualities of the rocks and fluids in those structures. The company processes seismic data acquired by its land and marine seismic acquisition crews, as well as seismic data acquired by non-affiliated third parties. In addition, the company reprocesses the previously processed data using techniques to improve the quality of seismic images. The company conducts its seismic imaging operations out of 4 major international centers located in Houston (the U.S.), Crawley (England), Massy (France) and Singapore, and 15 regional centers spread worldwide. In addition to this network of open centers, serving various clients, the company operates 9 centers each dedicated to serving a single specific client. In addition to subsurface imaging, the company offers geophysical consulting services. In addition to geophysical data, the company, under the Robertson brand, develops and maintains libraries of various types of geological data covering majority geographic areas of interest to petroleum and mining companies. The company licenses this data to clients, who use it in the early stages of their exploration efforts, often as a precursor to seismic exploration. Its geologists and other geo-professionals also engage in various types of proprietary studies for clients. The company also sells seismic data processing software, under the geovation brand and sells software for reservoir characterization, interpretation, and modeling under the Hampson-Russell, Jason, Insight Earth and Velpro brands, allowing clients to produce reservoir studies. Further, the company is engaged in the business of providing data storage and retrieval solutions, and data transformation services to oil companies and oil oriented government agencies under the Smart Data Solutions brand. Competition MCNV’s major competition comes from Schlumberger (WesternGeco), PGS and TGS. Strategy Key elements of the company’s strategy are to rebalance its profile towards more profitable and less capital intensive businesses; focus on growth areas; develop technological synergies for products and capitalize on new generation equipment; develop and utilize innovative technology; emphasize client service; provide integrated services; develop well-positioned data libraries; and develop reservoir applications. Seasonality The company has historically experienced higher levels of activity in its equipment manufacturing operations in the fourth quarter (year ended December 2017) as its clients seek to fully deploy annual budgeted capital. The same happens in its multi-client activity with oil and gas companies that seek to fully deploy their exploration budget in the last quarter of the year. Research and Development The company’s research and development expenditures, net of government grants received included U.S. $29 million in 2017. Regulations The company has a structured approach to HSE, built on its HSE Operating Management System. Significant Events In February 2020, CGG and Fairfield Geotechnologies have signed a second cooperation agreement to acquire a series of high-density, multi-client surveys in the Central Basin Platform (CBP) of the Permian Basin located in West Texas. The new wide-azimuth datasets would provide an understanding of the structural complexity of the transition between the CBP and surrounding basins to improve industry drilling efforts. The CGG/Fairfield agreement area covers approximately 6,500 square miles across various counties, including Gaines, Andrews, Ector, Crane and Upton County. History The company was founded in 1931. It was formerly known as Compagnie Generale de Geophysique and changed its name to CGG in 2013.