Geokinetics Inc. and Petroleum Geo-Services announced Dec. 3, 2009 that they have signed a definitive agreement under which Geokinetics, a leading provider of seismic data acquisition, processing and interpretation services, will acquire the onshore seismic data acquisition and multi-client data library business of PGS (PGS) in a cash and stock transaction valued at approximately $210 million, on a cash free, debt free basis, which includes net working capital of $37.5 million, according to a press release from Avista Capital Partners.

The final purchase price is subject to certain customary post-closing adjustments. The transaction is expected to close in the first quarter of 2010 and is subject to normal closing conditions and regulatory approvals; there is no financing condition.

Following the closing of the transaction, PGS will become Geokinetics’ second-largest shareholder after affiliates of Avista Capital Partners.

Avista Capital Partners makes controlling or influential investments, primarily in U.S.-based companies in connection with various transaction structures, including leveraged buyouts, buildups and growth financings in the energy, healthcare and media sectors.

The combination of Geokinetics and PGS Onshore will create the second largest provider of onshore seismic data acquisition services in the world in terms of crew count and the largest based in the Western Hemisphere.

The combined company will have the assets and technical capabilities to support up to 38 crews and carry in excess of 207,000 equipment channels and over 150 vibroseis units; and possess in excess of 6,240 square miles of multi-client library data upon completion of current projects in progress. Empowered by a broad range of technologies that include transition zone (”TZ”), ocean bottom cable (”OBC”) and land vibroseis, the new Geokinetics will be able to compete more effectively within the entire seismic value-chain of planning, proprietary and multi-client acquisition, processing and interpretation services.

Furthermore, this acquisition will propel Geokinetics into new markets including Alaska and Mexico, as well as certain new countries in the Middle East and North Africa. As a result, Geokinetics will have a greater geographic reach overall, with a more significant presence in Africa and Asia and a leadership position in the Americas.

“We are extremely pleased to enter into this agreement with PGS as it solidifies Geokinetics’ position as the clear leader in the onshore seismic data acquisition business,” said Richard F. Miles, President and Chief Executive Officer of Geokinetics. “With the addition of PGS Onshore’s technologies; its broad international operations capable of working in diverse climate conditions; its extensive multi-client library providing multi-year potential and a focus on high-impact drilling areas or areas of high lease turnover, we will be able to expand our services, accelerate our entrance into the multi-client business and enhance our position within the seismic contractor industry.”

Following the closing of the transaction, PGS will become Geokinetics’ second-largest shareholder after Avista Capital Partners. The acquisition is expected to provide annual synergies in excess of $10 million, driven mainly by organizational streamlining and cost reductions.