Profile: ION Geophysical Corporation (IO.N)

ION Geophysical Corporation (ION), formerly Input/Output, Inc., is a technology-focused seismic solutions company that provides advanced seismic data acquisition equipment, seismic software, and seismic planning, processing, and interpretation 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 high-resolution images of the subsurface during exploration, exploitation, and production operations. ION’s products and services are intended to measure and interpret seismic data about rock and fluid properties within the Earth’s subsurface, which enables oil and gas companies to make improved drilling and production decisions. In September 2008, the Company acquired ARAM Systems Ltd. and Canadian Seismic Rentals Inc. Its subsidiaries include Concept Systems Holdings Limited, GX Technology Corporation (GXT), ARAM Systems Ltd. and Canadian Seismic Rentals Inc.

The Company operates through four segments. Three of these segments Land Imaging Systems, Marine Imaging Systems and Data Management Solutions make up its ION Systems division. The fourth segment is its ION Solutions division. Its products and services include land and marine seismic data acquisition equipment, navigation, command and control, and data management software products, planning services for survey design and optimization, seismic data processing services and seismic data libraries.

ION Systems Division

Products for ION’s Land Imaging Systems business segment include Land Acquisition Systems, Geophones and Vibrators and Energy Sources. The Company’s cable-based Scorpion and ARIES land acquisition systems consist of a central recording unit and multiple remote ground equipment modules that are connected by cable. The central recording unit is in a transportable enclosure that serves as the control center of each system and is mounted within a vehicle or helicopter. The central recording unit receives digitized data, stores the data on storage media for subsequent processing, and displays the data on optional monitoring devices. It also provides calibration, status, and test functionality. The remote ground equipment consists of multiple remote modules and line taps positioned over the survey area. Seismic data is collected by analog geophones or VectorSeis digital sensors.

ARIES product line consists of analog cable-based land acquisition systems and related peripherals and equipment. ARIES land system products include remote acquisition modules (RAM), which acquire analog seismic data from the geophones and transmit the data digitally to the central processing equipment, and line tap units that interconnect baseline cables from the recording equipment to multiple receiver lines and function to retransmit data from the RAMs to central recording equipment. ARIES products also include system batteries, central recording equipment, baseline cables that connect the central recording equipment with the taps and receiver line cables that connect geophones or hydrophone groups to a RAM.

Scorpion is capable of recording full-wave seismic data. Digital sensors can provide increased response linearity and bandwidth, which translates into higher resolution images of the subsurface. Scorpion contains numerous enhancements that are designed to reduce its manufacturing costs, improve system reliability and productivity, and enable higher station count acquisition. Each Scorpion system is capable of recording with digital, full-wave VectorSeis sensors or analog geophones. VectorSeis technology has been used to acquire seismic data in North America, Europe, Asia, the Pacific Basin region, the Middle East, and the Commonwealth of Independent States. It is also used as the primary sensor device on its FireFly cableless land acquisition system. FireFly is a cableless system for full-wave land seismic data acquisition.

Geophones are analog sensor devices that measure acoustic energy reflected from rock layers in the Earth’s subsurface using a mechanical, coil-spring element. Vibrators are devices carried by large vibroseis vehicles and, along with dynamite, are used as energy sources for land seismic acquisition. ION markets and sells the AHV-IV, an articulated tire-based vibrator vehicle, and a tracked vibrator, the XVib, for use in environmentally sensitive areas such as the Arctic tundra and desert environments. Its Pelton division is a provider of energy source control and positioning technologies. Pelton’s Vib Pro control system provides vibrator vehicles with digital technology for energy control and global positioning system technology for navigation and positioning.

Products for ION’s Marine Imaging Systems business segment include Marine Acquisition Systems, Marine Positioning Systems and Source and Source Control Systems. Marine Acquisition Systems consists of towed marine streamers and shipboard electronics that collect seismic data in water depths greater than 30 meters. The hydrophones detect acoustical energy transmitted through water from the Earth’s subsurface structures. The Company developed VectorSeis Ocean (VSO) system, an advanced system for seismic data acquisition using redeployable ocean bottom cable. Its DigiCOURSE marine streamer positioning system includes streamer cable depth control devices, lateral control devices, compasses, acoustic positioning systems, and other auxiliary sensors. It 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 potential hydrocarbon reserves. DigiFIN is an advanced lateral streamer control system designed to maintain tighter, more uniform marine streamer separation along the entire length of the streamer cable. ION 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. It offers digital source control system (DigiSHOT), which allows for reliable control of air gun arrays for 4-dimensional (4-D) exploration activities.

Data Management Solutions products and services segment supplies software systems and services for towed marine streamer and seabed operations. Products and services for its Data Management Solutions business segment include Marine Imaging, Seabed Imaging, Survey Design, Planning and Optimization and Post-Survey Analysis Tools. Orca is a software product for towed streamer navigation and integrated data management applications. It includes modules designed to manage acquisition marine surveys integrating the navigation, source control, and streamer control functions. It can manage complex marine surveys such as time-lapse 4-D surveys and Wide Azimuth Towed Streamer (WATS) surveys. GATOR is an integrated navigation and data management software system for multi-vessel ocean bottom cable and transition zone 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. The Company also offers consulting services for planning, designing and supervising complex surveys, including 4D and WATS survey operations.

ION Solutions Division Services

Services of the Company’s ION Solutions business segment include Seismic Data Processing, Integrated Seismic Solutions (ISS) and Seismic Data Libraries. The GXT Imaging Solutions group provides a variety of seismic data processing and imaging services to E&P companies for marine, ocean bottom and land environments. Services include survey planning and design, project oversight of data acquisition operations, advanced signal processing, final image rendering and geophysical and reservoir analysis. It offers processing and imaging services, through which it develops a series of subsurface images by applying its processing technology to data owned or licensed by its customers. The GXT Imaging Solutions group uses parallel computer clusters to process seismic data by applying advanced algorithms and workflows that incorporate techniques, such as illumination analysis, data conditioning and velocity modeling, and time and depth migration.

ION’s ISS 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. It 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. GXT has acquired and processed a growing seismic data library consisting of non-exclusive marine and ocean bottom data worldwide. It consists of ultra-deep 2-dimensional (2-D) lines that E&P companies use to better evaluate the evolution of petroleum systems at the basin level, including insights into the character of source rocks and sediments, migration pathways, and reservoir trapping mechanisms.

The Company competes with Societe d’Etudes Recherches et Construction Electroniques, Compagnie General de Geophysique Veritas, CGGVeritas, WesternGeco, Sercel, Ascend Geo, OYO Geospace, Fairfield and Wireless Seismic.