OREANDA-NEWS. November 17, 2011. Integra Group announces a business combination of its formation evaluation segment with Geotech Holding.

Intention to seek admission of GDRs of the combined business to the London Stock Exchange and to spin-off securities in the combined business to eligible holders of Integra Group shares and GDRs.

Introduction

Integra Group (LSE: INTE) (“Integra Group” or the “Company”) announces that Integra Group, Schlumberger Oilfield Holdings Limited (“Schlumberger”), Geotech Oil Services Holding Limited (“GOSH”) and IG Seismic Services Limited (“IGSS”) have entered into a conditional agreement to combine IGSS, the entity through which Integra Group and Schlumberger conduct their land and transition zone seismic joint venture in Russia and the CIS, with GOSH's seismic business, conducted through Geotech Holding JSC (“Geotech Holding”). The combination will be effected through the transfer by GOSH of 99% of the issued share capital of Geotech Holding to IGSS in exchange for newly issued shares in IGSS (the “Transaction”). Following completion of the Transaction (“Completion”), Integra Group will hold 36%, Schlumberger will hold 12%, and GOSH will hold 52% of the entire enlarged issued share capital of IGSS.

Completion is expected to occur in December 2011, subject to satisfaction of certain conditions, including approval of the Transaction by Integra Group shareholders at the Extraordinary General Meeting of Integra Group which is expected to be held on 5 December 2011 and the receipt of certain anti-trust approvals.

Anticipated Benefits of the Transaction

It is expected that the Transaction will create one of the largest land seismic companies globally, with a leading position in the Russian and CIS market and access to all the key customers and provinces in the region. The combined seismic business will offer high quality seismic acquisition, data processing and interpretation services and will benefit from the wider application of IGSS’s transition zone capabilities and access to certain interpretation and land seismic and data processing software (Omega 2 and Petrel, both of which are trademarks of Schlumberger group) from the Schlumberger group as well as the right to use Schlumberger group’s proprietary “UniQ” technology and tailored training. The access to the defined Schlumberger group proprietary technologies and training is expected to add significant value to the services being delivered to clients.

Annual cost savings of over USD 15MM are expected to be achieved from optimisation of logistical and maintenance facilities and other overheads in the second year from Completion, and further revenue and cost benefits are also expected from improved asset utilisation and logistics.

Proposed Admission and Proposed Dividend in Specie

In connection with the Transaction, Integra Group, Schlumberger, GOSH and IGSS have also agreed that, following Completion, IGSS will seek admission of its shares in the form of global depositary receipts (“GDRs”) to the Official List of the UK Listing Authority and to trading on the London Stock Exchange's market for listed securities (“Proposed Admission”). It is currently targeted that Proposed Admission will occur by 30 September 2012. At the same time as Proposed Admission, Integra Group will spin-off the shares in IGSS held by Integra Group at Completion to its eligible shareholders and will procure the distribution of GDRs representing IGSS shares to the eligible holders of its GDRs in proportion to such shareholders’ and Integra Group GDR holders’ respective holdings in Integra Group (the “Proposed Dividend in Specie”). Simultaneously with the Proposed Dividend in Specie GOSH intends to spin-off shares in IGSS acquired by GOSH at Completion to its shareholders.

The securities underlying the Proposed Dividend in Specie will only be transferred, distributed or delivered, directly or indirectly, within the United States to qualified institutional buyers (or "QIBs"), as defined in Rule 144A of the Securities Act of 1933, as amended (the "Securities Act"), or pursuant to another exemption from, or in transactions not subject to, registration under the Securities Act, and to persons outside the United States in offshore transactions in reliance upon Regulation S of the Securities Act, except that distributions to residents of or persons located within the Russian Federation will be restricted to Russian qualified investors as defined under Russian law. In order to receive the Proposed Dividend in Specie, holders of Integra Group GDRs and Integra Group shareholders will be required to make certain representations, warranties and confirmations regarding their eligibility to receive such Proposed Dividend in Specie prior to the date of Proposed Admission. Integra Group will communicate separately with Integra Group GDR holders and shareholders prior to Proposed Admission to determine eligibility to receive the Proposed Dividend in Specie. Those holders of Integra Group GDRs who cannot or do not make such representations, warranties and confirmations will have their securities sold with the net sale proceeds being remitted to such holders according to their proportionate share in the net sale proceeds.

Antonio Campo, CEO of Integra Group, commented:

“The creation of IGSS brought together Integra Group’s vast experience in Russia and the CIS with the unique seismic technology and expertise of Schlumberger. The combination of IGSS with Geotech Holding will create one of the largest land and transition zone seismic companies in the world, which will be ideally placed to benefit from the attractive trends in the Russian and CIS seismic markets as well as from the substantial synergy potential and economies of scale from the combination of two of the leading players in the industry.

“Following completion of the transaction, we intend to focus on continuing to expand Integra Group’s position as a leading provider of well construction, production and completion services and engineering and IPM solutions in Russia, offering a suite of complementary services and solutions for all stages of a reservoir’s life cycle to our clients.

“Following completion of the transaction, the proposed admission of IGSS and the proposed dividend in specie to be made by Integra Group, two focused listed pure-play oilfield service businesses will be created.”

Nikolay Levitskiy, President of Geotech Holding, commented:

“We have built Geotech Holding into one of the leading seismic companies in Russia, with strong market positions and infrastructure in all of Russia’s most important provinces and relationships with the key state-owned and private-sector oil and gas companies and Russian government agencies responsible for state-funded geological exploration.

“We share with IGSS’ shareholders a vision of creating a leading seismic player in the Russia and CIS seismic market, and see this transaction as an exciting opportunity for IGSS and Geotech Holding’s shareholders to share in the significant value creation potential from the combination of the two companies. Through this combination and the strategic support of Schlumberger we will be able to offer best-in-class service to all our clients delivered with our combined financial strength and the flexibility to serve our clients wherever and whenever.”