Profile: Ion Geophysical Corp (IO)

ION Geophysical Corporation (ION) is a technology-focused seismic solutions company, which provides acquisition equipment, software and planning and seismic processing services to the global energy industry. The Company’s products, technologies, and services are used by oil and gas exploration and production (E&P) companies and seismic acquisition contractors to generate images of the subsurface during exploration, exploitation, and production operations. ION operates in four business segments: solutions, systems, software and INOVA Geophysical. The Company’s products and services include seismic data processing and reservoir imaging services; seismic data libraries; planning services for survey design and optimization; marine seismic data acquisition equipment; navigation, command and control and data management software products, and Land seismic data acquisition equipment (principally through its 49% ownership in INOVA Geophysical). In December 2011, the Company acquired 235 square miles of three dimensional (3D) multi-client seismic data in the Marcellus shale play in central Pennsylvania, known as ClearfieldSCAN.

Solutions Services

The Company’s GeoVentures services are designed to manage the entire seismic process, from survey planning and design to data acquisition and management, through pre-processing and final subsurface imaging. The GeoVentures group focuses on the technologically intensive components of the image development process, such as survey planning and design and data processing and interpretation, and outsources the logistics component to geophysical logistics contractors. ION offers its GeoVentures services to customers on both a proprietary and multi-client basis. The data libraries licensed by GeoVentures consist of ultra-deep 2-D seismic survey data that E&P companies. SPANS geophysical data libraries exist for major offshore basins worldwide, including the Gulf of Mexico, the Caribbean, ff the north, east and west coasts of South America, off the east and west coasts of Africa, off the east and west coasts of India, the Arctic Ocean, off Australia, and off certain southeast Asian coasts. During 2011, it announced expansions of its East AfricaSPAN data library, acquiring approximately 8,700 kilometers of regional seismic data offshore Tanzania, Mozambique, and Comoros, and ArcticSPAN data library, acquiring an additional 5,200 kilometers of regional seismic data offshore Northeast Greenland.

Systems Products

The Company’s marine acquisition system consists of towed marine streamers and shipboard electronics that collect seismic data in water depths greater than 30 meters. Marine streamers, which contain hydrophones, electronic modules and cabling, may measure up to 12,000 meters in length and are towed (up to 20 at a time) behind a towed streamer seismic acquisition vessel. The hydrophones detect acoustical energy transmitted through water from the Earth’s subsurface structures. During the year ended December 31, 2011 (During 2011), the Company delivered a twelve-streamer DigiSTREAMER system to BGP. The Company’s DigiCOURSE marine streamer positioning system includes streamer cable depth control devices, lateral control devices, compasses, acoustic positioning systems, and other auxiliary sensors. This equipment is designed to control the vertical and horizontal positioning of the streamer cables and provides acoustic, compass, and depth measurements to allow processors to tie navigation and location data to geophysical data to determine the location of hydrocarbon reserves.

During 2011, the Company had sold and delivered 35 DigiFIN systems, and have completed multiple DigiFIN vessel expansions. The Company manufactures and sells air guns, which are the primary seismic energy source used in marine environments to initiate the acoustic energy transmitted through the Earth’s subsurface. An air gun fires a high compression burst of air underwater to create an energy wave for seismic measurement. It offers a digital source control system (DigiSHOT), which allows for reliable control of air gun arrays for four-dimensional (4-D) exploration activities. Geophones are analog sensor devices that measure acoustic energy reflected from rock layers in the Earth’s subsurface using a mechanical, coil-spring element. It markets a range of geophones and geophone test equipment that operate in most environments, including land, transition zone, and downhole.

Software Products and Services

ION supplies software systems and services for towed marine streamer and seabed operations. Software developed by the Company’s subsidiary, Concept Systems Holdings Limited (Concept Systems), is installed on towed streamer marine vessels worldwide and is a component of many redeployable and permanent seabed monitoring systems. Orca is its software product for towed streamer navigation and integrated data management applications. During 2011, the Company outfitted seven streamer vessels with Orca software, a number of these installations were replacements of legacy Concept Systems products. Orca includes modules designed to manage marine acquisition surveys integrating the navigation, source control, and streamer control functions. Orca manages marine surveys, such as time-lapse 4-D surveys and Wide Azimuth Towed Streamer (WATS) surveys.

WATS is a technique for imaging complex structures (such as subsalt formations) in the marine environment, generally implemented with multiple source vessels that shoot at some distance from the streamer recording vessel. Orca is designed to function with its DigiFIN product, which enables streamer lateral control, and DigiSTREAMER, its new marine streamer acquisition system. SPECTRA is a Concept Systems’ legacy integrated navigation and survey control software system for towed streamer-based two-dimensional (2-D), three-dimensional (3-D), and 4-D seismic survey operations. Concept Systems offers GATOR, an integrated navigation and data management software system for multi-vessel ocean bottom cable and transition zone (such as marshlands) operations. The GATOR system is designed to provide real-time, multi-vessel positioning and data management solutions for ocean-bottom, shallow-water, and transition zone crews. During 2011, Concept released its GATOR II software system, with enhanced functionality for seabed operations. Concept Systems also offers consulting services for planning, designing and supervising complex surveys, including 4D and WATS survey operations. The Company’s Orca and GATOR systems are designed to integrate with its post-survey tools for processing, analysis, and data quality control, including by use of its REFLEX software for seismic coverage and attribute analysis, and its Optimiser technology planning tool.

INOVA Geophysical Products

The products of INOVA Geophysical include Land Acquisition Systems, and The latest version of ARIES and Energy Sources. INOVA provides two offerings for cableless land acquisition, FireFly and Hawk. FireFly is INOVA’s radio-based cableless system. It allows for a central location to communicate with the field units through radio and receive information back from the field units. This communication link allows for management of the equipment on the ground by relaying commands that respond to operational variables. It also provides quality control information from the field as to the status of the equipment and geophysical attributes. During 2011, INOVA Geophysical introduced its FireFly DR31 system, providing increased ruggedness and protection through an aluminum enclosure, reduced power consumption and support for 3-channel analog or VectorSeis digital sensors within the same field electronics.

During 2011, INOVA Geophysical released its Hawk SN11 autonomous node cableless system. Hawk is a version of FireFly that provides a wireless platform without radio infrastructure. VectorSeis is INOVA’s digital multicomponent sensor and it can be used with all of its recording systems. INOVA Geophysical cable-based land acquisition systems, Scorpion and ARIES, consist of a central recording unit and multiple remote ground equipment modules that are connected by cable. Seismic data is collected by analog geophones or VectorSeis digital sensors. INOVA Geophysical ARIES product consists of analog cable-based land acquisition systems and related peripherals and equipment. ARIES land system products include remote acquisition modules (RAMs), which acquire seismic data from the sensors and transmit the data digitally to the central processing equipment.

The ARIES II land recording system features a 24-bit system architecture that is designed to improve channel capacity, ensure efficient equipment deployment, and maximize system performance. It is also enabled to work with analog geophones and VectorSeis digital sensors and provides continuous recording functionality for microseismic and high productivity vibroseis operations. Aries II supports high channel count, source-driven, high productivity vibroseis acquisition. The Scorpion system is capable of recording digital multicomponent seismic data, as well as analog data. INOVA Geophysical markets and sells the AHV-IV, a line of articulated tire-based vibrator vehicles, and a tracked vibrator, the XVib, for use in environmentally sensitive areas, such as the Arctic tundra and desert environments. During 2011, INOVA launched the UniVib, a smaller vibrator with up to 26,000 pound peak force that allows easier mobility and offers options for vibroseis or accelerated impulse source generation. NOVA Geophysical is also a provider of energy source control and positioning technologies. The Vib Pro control system provides vibrator vehicles with digital technology for energy control and global positioning system technology for navigation and positioning. The Shot Pro dynamite firing system is the equivalent technology for seismic operations using dynamite energy sources.

The Company competes with Compagnie General de Geophysique Veritas, WesternGeco L.L.C. and Societe d’Etudes Recherches et Construction Electroniques.