Speculative surveys have been both the best and the worst thing to happen to the seismic industry. But at least one company still likes the business model.

In its purest sense, the speculative concept enabled oil companies to share the cost of expensive 3-D surveys amongst themselves, with the added benefit of letting the geophysical contractor keep the data as its own asset to resell.

In its reality in the late 1990s, when demand for 3-D seismic data dropped precipitously along with the price of oil and natural gas, spec seismic became an avenue for geophysical contractors to keep their crews active rather than dry-docking them. If they could sell the data for pennies on the dollar, it was better than nothing.

Ultimately, spec has become a dirty word in much of the geophysical contracting community. Once oil companies became used to the lower prices, they were unwilling to pay full price for proprietary surveys. They were able to encourage bidding wars amongst contractors desperate for work, and the cost of high-quality data reached the bargain basement vicinity. Most contractors attempted to revert to business models that focused on smaller reservoir-scale proprietary surveys, hoping to eventually recoup the losses engendered by their over-valued data libraries.

And then, in September 2003, Fairfield Industries announced that it's starting up a second spec crew to work in the shallow waters of the Gulf of Mexico. And, incredible as it may seem, the justification is that demand for data in this region necessitates the move.

The first area of acquisition will be offshore Louisiana in the Mound Point region just southeast of Marsh Island. This area has two recent deep gas discoveries by McMoRan Oil and Gas and partners.
Ultimately the larger program will encompass Mound Point, Rabbit Island, parts of Atchafalaya Bay, East and West Cote Blanche Bay, and Vermilion Bay.

"We wouldn't have done this on our own," Marc Lawrence, data licensing division manager for Fairfield, said. "There's demand for this, equated in terms of dollars."

Lawrence argued that Fairfield's "bottom reference" technology, in which the hydrophones are on the seafloor, is ideally suited for acquiring long-offset data in extremely shallow water depths, which is what is needed to target the deep gas objectives in the shallow-water Gulf of Mexico. As a comparison, other companies attempting to image the targets are resorting to 2-D data because shooting long-offset 3-D streamer data in shallow water around existing infrastructure is dangerous to seismic streamers.
So why the new crew? Even for Fairfield, which has never ventured past a few hundred feet of water depth, the coastal areas are shallower than its existing crews are equipped for without considerable re-rigging. It has made more sense to start up a new crew.

"Putting out a new crew doesn't just cost a million dollars - it's considerably more than that," Steve Mitchell, vice president and division manager for data acquisition, said. "But it goes back to demand - that's it in a nutshell."

PGS restructures

After filing a petition for protection under Chapter 11 of the US Bankruptcy Code in an effort to restructure, Petroleum Geo-Services ASA (PGS) shareholders approved that company's restructuring plan in October. The shareholders also approved certain transactions contemplated by the plan, including the issuance of new ordinary shares, and selected a new board of directors, including Jens Ulltveit-Moe, Francis Gugen, Keith Henry, Harald Norvik, Rolf Erik Rolfsen, Clare Spottiswoode and Anthony Tripodo.
PGS emerged from Chapter 11 in early November.

Under the plan, the company's existing bank debt and outstanding senior notes will be cancelled in exchange for a combination of new senior notes, new ordinary shares, cash and possibly interests in a new term loan facility. The company's outstanding junior subordinated debentures and existing ordinary shares will be cancelled in exchange for new ordinary shares.

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