Norwegian geophysical services company Electromagnetic Geoservices (EMGS) has received a letter of intent for data licensing from an undisclosed customer.
EMGS said last Friday that the approximate value of the potential deal was $8 million.
Under the letter of intent, the customer will license certain data from the company’s existing EM multi-client library in Norway and prefund a new multi-client acquisition in the North Sea.
The letter of intent also includes a settlement of future potential uplift obligations towards the company for certain multi-client data licensed by the customer.
EMGS added that it expected to recognize around $7 million in the first quarter of 2019, subject to a final contract being signed under the letter of intent.
In recent company news, EMGS received a letter of award from an undisclosed client for a proprietary data acquisition survey in southeast Asia.
EMGS is experiencing a challenging market and liquidity situation and there is consequently some uncertainty related to the company’s ability to meet its obligations under the $2.5 million free cash covenant under the company’s convertible bond loan and bank facilities.