New strategic alliance sets eyes on transforming subsea and OBN markets

Norway’s Argeo and Shearwater GeoServices have entered a strategic alliance with the aim of innovating and pioneering new technology and products across the subsea and ocean bottom node (OBN) markets.

The collaboration aims to drive innovation across all relevant sectors and markets, including the development of new robotic solutions for OBN seismic, and targets the development of new integrated methods and service offerings for the carbon capture, utilization and storage (CCUS) market.

The strategic alliance and planned collaborative marketing is expected to expand Argeo’s presence in the global offshore energy sector, as well as open for new joint business opportunities for both companies through shared clients and projects supported by a more comprehensive joint service and product portfolio.

Argeo has entered into a memorandum of agreement (MOA) to acquire the seismic vessel SW Bell from Shearwater for $6 million in cash plus 20,123,625 shares in Argeo.

The vessel will be converted from a towed streamer seismic vessel to a full subsea inspection, maintenance and repair (IMR) vessel and will be renamed.

Argeo has received an indicative outline for bank loan financing of $12 million where the use of proceeds is $10 million allocated to the purchase and conversion of the vessel and $2 million as a credit facility.

The parties also signed a letter of intent (LOI) for a long-term capacity agreement which will enable Shearwater or its affiliates to hire vessel capacity from Argeo for OBN operations. The capacity agreement, which is a condition precedent to the transaction, will be finalized this month.

“We aim to deliver substantial economies of scale by sharing assets and vessel capacities throughout the value chain, thereby increasing utilisation and driving further market growth,” said Trond Figenschou Crantz, CEO of Argeo.

“Argeo will be able to include its AUV products and technologies onboard Shearwater’s vessels and Shearwater will have the benefit of hiring Argeo’s subsea vessels for their OBN operation.”

Following the vessel acquisition, expected to be completed in October, Shearwater will nominate one member to Argeo’s board of directors.

Completion of the transaction, including the vessel acquisition and capacity agreement, is subject to customary closing conditions.

“We are excited about teaming up with Argeo in this unique alliance between marine seismic and subsea to push the boundaries of the rapidly growing OBN market,” said Irene Waage Basili, CEO of Shearwater.

“The alliance has significant strategic potential, and we look forward to exploring synergies in our respective markets together with the experienced Argeo team in the coming years.”

Argeo is currently on its way to having the world’s most advanced autonomous underwater vehicle (AUV) fleet. Namely, the company recently signed a LoI with Kongsberg for a purchase agreement for three additional Hugin AUVs.