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OCTOBER 09,
2014 / 01:00PM GMT, DWSN - Dawson Geophysical Co and TGC Industries Joint
Conference Call to Discuss the proposed Strategic Business Combination 4
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affiliated companies. Moving on to 8. In addition to expanded equipment base,
client base, order book, and personnel, the combination brings together
complementary services. These services include first-in-class health, safety,
environmental program and commitment; increased land surveying and permitting
capacity; improved IT support; expanded repair capabilities; trucking
services; data process; research and development; and dynamite energy source
drilling services. Some of these services are common to both companies, and
some are services currently provided by one or the other. The new Dawson
allows for the potential of less dependence on third-party providers;
increased revenue streams; and a better, more timely, cost-effective product
for our clients. As we examine the combination and we look at the improved
platform of shared people, equipment, and services, we believe there exists
at almost every level advantages that will flow through to our shareholders,
clients and employees. The seismic market has been and continues to be
difficult for all players worldwide, particularly North America. Both
companies have struggled with low utilization rates for a variety of reasons
in the US. Here at Dawson, our demand has been steady, but we have
encountered difficulty in maintaining a high level of utilization due to
project delays. Our entry into Canada has been slower than anticipated. TGC,
through its Eagle Canada brand, has a long history and done well in Canada
for many years. But like us, they have continued to struggle with similar
issues to ours in the Lower 48. We operated 10 crews for most of the
September quarter but have suffered with weatherrelated issues late in the
quarter; several untimely, long crew moves; and short delays on projects for
two crews. TGC's utilization has picked up to five crews in the US, and they
are in the early stages of the Canadian uptick. Each Company will have costs
associated with this transaction in the September and December quarters. We
continue to look at ways to rightsize to meet client needs, plan for the
future, and maintain higher utilization. We believe the combination of all
things we have discussed give us a good opportunity to address these issues. Provided
we can execute, put into place solid logistics plans and processes,
capitalize on our support services, and reduce outsourcing dependence and
improve utilization, a 5% to 10% decrease in overall operational expense is
plausible. That said, we have the right size of capacity to meet client
needs, increase efficiencies and utilization rates; and we believe there will
be value added to clients, shareholders, and employees. And at this point, I
will turn control of the call over to Wayne Whitener, CEO, President of TGC
Industries. Wayne Whitener - TGC Industries, Inc. - President, CEO, and
Director Thank you, Steve, and good morning, everyone. I'd like to start with
TGC is very excited about the business combination. We believe TGC brings
value to the combined Companies, with over 46 years' experience in the
seismic business and having the capacity to field 16 data acquisition crews
with some of the newest seismic equipment in the industry. We also bring a
strong balance sheet into the mix. TGC has a premier Canadian geophysical
company in Eagle Geo, which is a wholly-owned subsidiary of TGC, and after
the completion of this transaction will be a wholly-owned subsidiary of the
new Dawson and will operate as Eagle Canada. We believe these capabilities
and the strength that Dawson brings to the table will make us one of the
premier Companies in the geophysical space. With that, I'll turn the call
back over to Steve. Steve Jumper - Dawson Geophysical Company - Chairman,
President, and CEO Thank you, Wayne, well said. We'd like to thank everyone
for joining this morning's call. We firmly believe that the improved platform
of shared people, equipment, and services will increase utilization rates,
lower costs, and drive greater value for our clients, shareholders, and
employees. We believe that our expanded geographic presence, strength in the
balance sheet, and complementary equipment base will improve efficiencies and
create new growth opportunities across the combined portfolio. And we believe
that the resulting benefits will flow back to all three entities,
shareholders, clients, and employees. Dawson Geophysical is 62 years old;
Wayne, I believe TGC/Tideland is 47 years old. We believe that our more than
100 years of combined industry experience, equipment -- expanded equipment
base, increased financial/internal support services will enable us to shorten
cycle times and provide higher-resolution images for our valued clients.
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