Obbligazione CGG Global 6.5% ( US204384AB76 ) in USD

Emittente CGG Global
Prezzo di mercato 100 USD  ▲ 
Paese  Francia
Codice isin  US204384AB76 ( in USD )
Tasso d'interesse 6.5% per anno ( pagato 2 volte l'anno)
Scadenza 31/05/2021 - Obbligazione è scaduto



Prospetto opuscolo dell'obbligazione CGG S.A US204384AB76 in USD 6.5%, scaduta


Importo minimo 200 000 USD
Importo totale 650 000 000 USD
Cusip 204384AB7
Standard & Poor's ( S&P ) rating N/A
Moody's rating N/A
Descrizione dettagliata CGG S.A. è una società multinazionale francese che fornisce servizi geofisici per l'esplorazione e la produzione di idrocarburi e risorse minerarie.

The Obbligazione issued by CGG Global ( France ) , in USD, with the ISIN code US204384AB76, pays a coupon of 6.5% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 31/05/2021







Form 424B3
424B3 1 d245043d424b3.htm FORM 424B3
Table of Contents
Filed Pursuant to Rule 424(b)(3) under the Securities Act of 1933
Commission File No. 333-177040
Offer to Exchange All Outstanding
6 1/2% Initial Senior Notes due 2021
Guaranteed on a senior basis by certain subsidiaries
(U.S.$650,000,000 aggregate principal amount outstanding) for
6 1/2% Exchange Senior Notes due 2021
Guaranteed on a senior basis by certain subsidiaries
Compagnie Générale de Géophysique-Veritas
We are offering to exchange all of our outstanding unregistered 6 1/2% Senior Notes due 2021 issued on May 31, 2011 for new registered
6 1/2% Senior Notes due 2021. The outstanding notes and the new notes are sometimes collectively referred to as the notes. The terms of the new
notes are identical to the terms of the outstanding notes except that the new notes are registered under the Securities Act of 1933 (the "Securities
Act") and, therefore, are freely transferable.
Please consider the following:


· You should carefully review the Risk Factors beginning on page 19 of this prospectus.

· Our offer to exchange outstanding notes for new notes will be open until 5:00 p.m., New York City time, on November 18, 2011, unless

we extend the exchange offer.


· The exchange offer is not conditional upon any minimum aggregate principal amount of outstanding notes being tendered.


· Tenders of outstanding notes may be withdrawn any time prior to the expiration of the exchange offer.


· The exchange of outstanding notes for new notes will not be a taxable event for U.S. federal income tax purposes.


· You should also carefully review the procedures for tendering the outstanding notes beginning on page 49 of this prospectus.

· If you fail to tender your outstanding notes, you will continue to hold unregistered securities and your ability to transfer them could be

adversely affected.

· No public market currently exists for the notes. Application has been made to admit the new notes to listing on the Luxembourg Stock

Exchange and to trading on the Euro MTF market.
Information about the Notes:


· The notes will mature on June 1, 2021.

· We will pay interest on the notes semi-annually on June 1 and December 1 of each year, beginning December 1, 2011, at the rate of

6 1/2% per annum.


· We may redeem the notes on or after June 1, 2016 at the redemption prices set forth on page 60 of this prospectus.

· We have the option until June 1, 2014, to redeem up to 35% of the original aggregate principal amount of the notes originally issued and

the notes with the net proceeds of certain types of equity offerings.

· At any time prior to June 1, 2016, we may also redeem all or a part of the notes at a redemption price equal to 100% of the principal

amount of the notes plus the applicable premium described in this prospectus.

· We may also redeem all, but not fewer than all, of the notes at a redemption price equal to 100% of the principal amount of the notes in

the event of certain changes affecting tax laws.

· The notes are our senior unsecured obligations and will rank equally in right of payment with all of our other existing and future senior

unsecured indebtedness and senior in right of payment to all our existing and future subordinated indebtedness.

· The notes will be initially guaranteed on a senior unsecured basis by certain of our subsidiaries. The notes and the subsidiary guarantees

will be effectively subordinated to all our secured obligations, all secured obligations of our subsidiaries that guarantee the notes and all
obligations of our subsidiaries that do not guarantee the notes.


· If we undergo a change of control or sell some of our assets, we may be required to offer to purchase notes from you.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities
or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is October 20, 2011
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Form 424B3
Table of Contents
TABLE OF CONTENTS



Page
WHERE YOU CAN FIND MORE INFORMATION

i
PRESENTATION OF INFORMATION

ii
INCORPORATION BY REFERENCE

ii
FORWARD-LOOKING STATEMENTS
iv
PROSPECTUS SUMMARY

1
SUMMARY OF THE EXCHANGE OFFER

9
SUMMARY OF THE TERMS OF THE NEW NOTES
12
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
16
RISK FACTORS
19
EXCHANGE RATES
39
OFFERING OF THE OUTSTANDING NOTES
40
USE OF PROCEEDS
41
DESCRIPTION OF CERTAIN INDEBTEDNESS
42
THE EXCHANGE OFFER
46
DESCRIPTION OF THE NOTES
55
OUTSTANDING NOTES REGISTRATION RIGHTS AGREEMENT
98
BOOK ENTRY, DELIVERY AND FORM
100
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER
102
PLAN OF DISTRIBUTION
106
LEGAL MATTERS
108
EXPERTS
108
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES
108
GENERAL INFORMATION
109


This prospectus is part of a registration statement we filed with the Securities and Exchange Commission. You should rely only on
the information or representations provided in this prospectus. We have not authorized any person to provide information other than that
provided in this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of
these securities in any jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of this document.


WHERE YOU CAN FIND MORE INFORMATION
We are subject to the reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act") applicable to foreign private
issuers. In accordance with the Exchange Act, we electronically file reports, including annual reports on Form 20-F and interim reports on Form 6-
K, and other information with the Securities and Exchange Commission. You may obtain these reports and other information by sending a written
request to CGGVeritas, Tour Maine-Montparnasse, 33 avenue de Maine, BP 191, 75755 Paris CEDEX 15, France, Attention: Investor Relations
Officer, Telephone: +33 1 64 47 45 00.
You can inspect and copy these reports, and other information, without charge, at the Public Reference Room of the Commission located at
100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. The Commission also maintains an Internet site at http://www.sec.gov that contains reports, proxy and
information statements, and other information regarding issuers that file electronically with the Commission. In addition, you can inspect

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material filed by us at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which American Depositary
Shares representing shares of our common stock are listed. As a foreign private issuer, we are not subject to the proxy rules under Section 14 or the
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Form 424B3
short-swing insider profit disclosure rules under Section 16 of the Exchange Act.
All information referred to above will, for so long as the notes are listed on the Luxembourg Stock Exchange, also be available, without
charge, at the specified office of the Paying Agent in Luxembourg during usual business hours on any weekday (Saturdays, Sundays and public
holidays excepted) from the date of this prospectus.
PRESENTATION OF INFORMATION
In this prospectus, references to "United States" or "U.S." are to the United States of America, references to "U.S. dollars", "$" or "U.S.$"
are to United States dollars, references to "France" are to the Republic of France and references to "euro" or "" are to the single currency
introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty Establishing the European Union.
Unless otherwise indicated, statements in this prospectus relating to market share, ranking and data are derived from management estimates
based, in part, on independent industry publications, reports by market research firms or other published independent sources. Any discrepancies in
any table between totals and the sums of the amounts listed in such table are due to rounding.
As used in this prospectus, "CGG" refers to Compagnie Générale de Géophysique and its subsidiaries before the merger between CGG and
Veritas, except as otherwise indicated, "Veritas" refers to Veritas DGC Inc. and its subsidiaries before the merger between CGG and Veritas,
except as otherwise indicated, and "CGGVeritas", "the Group", "we", "us" and "our" refer to Compagnie Générale de Géophysique-Veritas and its
subsidiaries, except as otherwise indicated.
INCORPORATION BY REFERENCE
The Commission allows us to "incorporate by reference" the information we file with the Commission in other documents, which means:


· incorporated documents are considered part of this prospectus;


· we can disclose important information to you by referring you to those documents; and


· information that we file with the Commission after the date of this prospectus automatically updates and supersedes this prospectus.
We incorporate by reference each of the following documents:


· our annual report on Form 20-F for the financial year ended December 31, 2010 filed with the Commission on April 21, 2010;


· our report on Form 6-K submitted to the Commission on May 2, 2011 with respect to our Joint Venture with Eidesvik Offshore;


· our report on Form 6-K submitted to the Commission on May 24, 2011 with respect to our Marine joint venture with Elnusa;


· our report on Form 6-K submitted to the Commission on May 24, 2011 with respect to our Marine joint venture with Petro Vietnam;

· our report on Form 6-K submitted to the Commission on May 25, 2011 with respect to the completion of BrodSeis' survey for Brunei

Shell Petroleum Company;

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· our report on Form 6-K submitted to the Commission on May 25, 2011 with respect to Sercel's breaking of the seismic recording

channel capacity barrier with the Giga Transverse;

· our report on Form 6-K submitted to the Commission on May 25, 2011 with respect to the award of a seismic permit in the Gulf of

Mexico;

· our report on Form 6-K submitted to the Commission on May 26, 2011 with respect to the signing of the first BrodSeis contract in the

Americas;

· our report on Form 6-K submitted to the Commission on June 28, 2011 with respect to our five-year charter agreement with Bourbon

for new support vessels;

· our report on Form 6-K submitted to the Commission on July 12, 2011 with respect to our completion of a 3D BroadSeis seismic

survey for Shell over deep water offshore Gabon.

· our report on Form 6-K submitted to the Commission on July 12, 2011 with respect our vessel utilization and fleet allocation updates

for the second quarter of 2011;


· our report on Form 6-K submitted to the Commission on July 29, 2011 with respect to our strategic agreement with Spectrum;

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· our report on Form 6-K submitted to the Commission on July 29, 2011 announcing our second quarter 2011 results;

· our report on Form 6-K submitted to the Commission on July 29, 2011 containing our unaudited interim financial statements for the six

months ended June 30, 2011; and

· our report on Form 6-K submitted to the Commission on September 19, 2011 announcing our listing on the Dow Jones Sustainability

Europe Index (DJSI).
In addition, we incorporate by reference each of the following documents that we will file with the Commission after the date of this
prospectus from now until the first anniversary of the effective date of the registration statement pertaining to the new notes:


· reports filed under Section 13(a), 13(c) or 15(d) of the Exchange Act; and


· any future reports filed on Form 6-K that indicate that they are incorporated by reference in this prospectus.

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You may obtain a copy of any of the documents referred to above (excluding exhibits) at no cost by contacting us at the following address:
CGGVeritas
Tour Maine-Montparnasse
33 avenue de Maine
BP 191, 75755
Paris CEDEX 15 France
Attention: Investor Relations Officer
Telephone: +33 1 64 47 45 00
To obtain timely delivery, you must request any document no later than five business days before the date of the expiration of this exchange
offer, meaning no later than November 10, 2011.
FORWARD-LOOKING STATEMENTS
This prospectus includes and incorporates by reference "forward-looking statements" within the meaning of the federal securities laws, which
involve risks and uncertainties, including, without limitation, certain statements made in "Item 4: Information on the Company" and "Item 5:
Operating and Financial Review and Prospects" in our 2010 annual report incorporated by reference herein. You can identify forward-looking
statements because they contain words such as "believes", "expects", "may", "should", "seeks", "approximately", "intends", "plans", "estimates",
or "anticipates" or similar expressions that relate to our strategy, plans or intentions. These forward-looking statements are subject to risks and
uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. We have based
these forward-looking statements on our current views and assumptions about future events. While we believe that our assumptions are reasonable,
we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could
affect our actual results. All forward-looking statements are based upon information available to us on the date of this prospectus.
Important factors that could cause actual results to differ materially from our expectations ("cautionary statements") are disclosed under "Risk
Factors" and elsewhere in this prospectus, including, without limitation, in conjunction with the forward-looking statements included in this
prospectus. All forward-looking information in this prospectus and subsequent written and oral forward-looking statements attributable to us, or
persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Some of the factors that we believe could affect
our actual results include:


· the impact of the current economic and credit environment;


· exposure to the credit risk of customers;


· the social, political and economic risks of our global operations;


· our ability to integrate successfully the businesses or assets we acquire;


· any write-downs of goodwill on our balance sheet;


· our ability to sell our seismic data library;


· exposure to foreign exchange rate risk;


· our ability to finance our operations on acceptable terms;


· exposure to fluctuations in fuel costs;
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· the timely development and acceptance of our new products and services;


· ongoing operational risks and our ability to have adequate insurance against such risks;

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· difficulties and costs in protecting intellectual property rights and exposure to infringement claims by others;


· the level of capital expenditures by the oil and gas industry and changes in demand for seismic products and services;


· our clients' ability to unilaterally terminate certain contracts in our backlog;


· the effects of competition;


· difficulties in adapting our fleet to changes in the seismic market;


· the seasonal nature of our revenues;


· the costs of compliance with governmental regulation, including environmental, health and safety laws;


· our substantial indebtedness and the restrictive covenants in our debt agreements;

· our ability to access the debt and equity markets during the periods covered by the forward-looking statements, which will depend on

general market conditions and on our credit ratings for our debt obligations;


· exposure to interest rate risk; and


· our success at managing the foregoing risks.
We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or
otherwise. We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In
addition, in light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur. When
considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in this prospectus,
including those described in the "Risk Factors" section of this prospectus.

v
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PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus to help you understand our business and the terms of the notes. You
should carefully read all of this prospectus, including the consolidated financial statements and related notes, to understand fully our business
and the terms of the notes, as well as some of the other considerations that may be important to you in making your investment decision. You
should pay special attention to the "Risk Factors" section of this prospectus to determine whether an investment in the notes is appropriate
for you.
Compagnie Générale de Géophysique-Veritas
We are a global participant in the geophysical seismic industry, as both a manufacturer of geophysical equipment and a provider of a
wide range of services (including seismic data acquisition and related processing and interpretation software). Our operations are organized
into two segments: Services and Equipment, in accordance with our internal reporting system, which we use to manage and measure our
performance.
Our geophysical Equipment segment operates through our subsidiary Sercel, the market leader in the development and production of
seismic acquisition systems and specialized equipment in the land and offshore seismic markets.
Our geophysical Services segment comprises the following divisions:


· marine contract: seismic data acquisition offshore undertaken by us on behalf of a specific client;


· land contract: seismic data acquisition for land, transition zones and shallow water undertaken by us on behalf of a specific client;

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· processing, imaging and reservoir: processing, imaging and interpretation of geophysical data, data management and reservoir

studies for clients; and

· multi-client land and marine: seismic data acquisition undertaken by us and licensed to a number of clients on a non-exclusive

basis.
We had consolidated operating revenues of 2,186.1 million and 1,051.5 million and consolidated operating income of 67.2 million
and 27.5 million for the year ended December 31, 2010 and the six months ended June 30, 2011, respectively. See "Summary Financial
Information".
We have more than 100 years of combined operating experience (through CGG and Veritas) and a recognized track record of
technological leadership in the science of geophysics. We believe we are well placed to capitalize on the growing importance of seismic
technology to enhance the exploration and production performance of our broad base of clients, which includes independent, international and
national oil companies.
Compagnie Générale de Géophysique-Veritas is the parent company of the CGGVeritas group. We are a société anonyme incorporated
under the laws of the Republic of France and operating under the French Commercial Code. Our registered office is at Tour Maine
Montparnasse, 33, avenue du Maine, 75015 Paris, France.
Our Business
Our geophysical Services segment accounted for 72% and our geophysical Equipment segment accounted for 28% of our consolidated
operating revenues for the year ended December 31, 2010 and for the six months ended June 30, 2011.


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The following table sets forth our consolidated operating revenues by activity in millions of euros or dollars, as the case may be, and the
percentage of consolidated operating revenues represented thereby, for the periods indicated:



Six months ended June 30,

Year ended December 31,



2011


2010


2009



(in millions, except percentages)

Land contract


171.2

16%
286.9
13%
274.2
12%
Marine contract


313.7

30%

585.2
27%

774.4
35%
Multi-client


126.8

12%

402.1
19%

370.2
17%
Processing, imaging and reservoir


146.3

14%

292.7
13%

289.6
13%
























Total Services


758.1

72%
1,566.9
72%
1,708.4
77%
Equipment


293.4

28%
619.2
28%
524.8
23%
























Total


1,051.5
100%
2,186.1
100%
2,233.2
100%
























We generate revenues (by location of customers) on a worldwide basis. For the year ended December 31, 2010, 27% of our consolidated
operating revenues were from North America, 13% from South and Central Americas, 40% from Europe, Africa and the Middle East, and
20% from Asia Pacific. For the six months ended June 30, 2011, 21% of our consolidated operating revenues were from North America, 19%
from South and Central Americas, 38% from Europe, Africa and the Middle East, and 22% from Asia Pacific.
The following table sets forth our consolidated operating revenues by region in millions of euros or dollars, as the case may be, and the
percentage of consolidated operating revenues represented thereby, for the periods indicated:



Six months ended June 30,


Year ended December 31,



2011


2010


2009



(in millions, except percentages)

North America


217.2

21%
584.5
27%
501.5
22%
Central and South Americas


197.0

19%

296.1
13%

156.8

7%
Europe, Africa and Middle East


402.2

38%

866.8
40%

982.1
44%
Asia Pacific


235.0

22%

438.7
20%

592.8
27%
























Total


1,051.5
100%
2,186.1
100%
2,233.2
100%
























Services
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Land
Land seismic acquisition includes all seismic surveying techniques where the recording sensor is either in direct contact with, or in close
proximity to, the ground. Our land business line offers integrated services, including the acquisition and on site processing of seismic data on
land, in transition zones and on the ocean floor (seabed surveys). We undertake land surveys on both a contract and multi-client basis.
We are a significant land seismic acquisition contractor worldwide, including in North America, and particularly in difficult terrain. Land
contract activities accounted for 13% of our consolidated operating revenues in 2010 and 16% of our consolidated operating revenues for the
six months ended June 30, 2011.
Marine
We provide a full range of 3D marine seismic services, principally in the Gulf of Mexico, the North Sea and off the coasts of West Africa
and Brazil, as well as in the Asia-Pacific region.


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We undertake both contract and multi-client marine seismic surveys. Contract surveys generally provide for us to be paid a fixed fee per
square kilometer of data acquired. When we acquire marine seismic data on a contract basis, the customer contracts to pay for and directs the
scope and extent of the survey and retains ownership of the data obtained. In regions where there is extensive petroleum exploration, such as
Brazil, the Gulf of Mexico, West Africa, the Mediterranean Sea and the North Sea, we also undertake multi-client surveys, in which we fund
the survey ourselves and retain ownership of the seismic data. This enables us to provide multiple companies access to the data by way of
license. As a result, we have the potential to obtain multiple and higher revenues, while our customers who license the data have the
opportunity to pay lower prices. The capacity to both acquire and process marine seismic data is an important element of our overall strategy
to maintain and develop our leading position in marine seismic data acquisition and processing.
Total marine contract accounted for 27% of our consolidated operating revenues in 2010 and 30% of our consolidated operating
revenues in the six months ended June 30, 2011.
We currently operate a combined fleet of 18 vessels, including eight high-capacity 3D vessels (with 12 or more streamers), seven 3D
vessels (with 7 to 10 streamers), and three small capacity 3D/2D vessels. The CGG Alizé, Oceanic Challenger, Symphony, Viking Vision,
Viking Vanquish, Oceanic Endeavour (formerly named Geowave Endeavour) and Oceanic Vega are each capable of deploying at least twelve
streamers simultaneously. Most of our high-capacity 3D vessels are equipped with Sentinel solid streamers, which offer numerous advantages
over fluid- or gel-filled streamers, such as the ability to work in rougher seas and to record more desirable frequencies with less noise and less
downtime and also eliminate the risk of oil spills due to damages to streamers. In 2010, we continued performance upgrades, equipping four
more vessels, the Oceanic Vega, Veritas Viking II, Viking Vanquish and Oceanic Endeavour (formerly named Geowave Endeavour), with the
Nautilus system allowing us to control the lateral positioning of the towed streamers.
Processing, Imaging and Reservoir
We provide seismic data processing and reservoir services through our network of data processing centers and reservoir teams located
around the world. Operating revenues from our Processing, Imaging and Reservoir business line accounted for 13% of our consolidated
operating revenues in 2010 and 14% of our consolidated operating revenues for the six months ended June 30, 2011.
We process seismic data acquired by our land and marine seismic acquisition crews as well as seismic data acquired by non-affiliated third
parties. Marine seismic data has been a significant source of the growth in demand for our data processing services. In addition, we reprocess
previously processed data using new techniques to improve the quality of seismic images.
Equipment
We conduct our equipment development and production operations through Sercel and its subsidiaries. We believe Sercel is the market
leader in the development and production of seismic acquisition systems and specialized equipment in the land and offshore seismic markets.
Sercel is operated as an independent division and makes most of its sales (82% for 2010 and 76% for the six months ended June 30, 2011) to
purchasers other than CGGVeritas. Sercel currently operates five seismic equipment manufacturing facilities, located in Nantes and Saint
Gaudens in France, Houston, Singapore and Alfreton in England. In China, Sercel operates through Sercel-JunFeng Geophysical Equipment
Co Ltd ("JunFeng"), based in Hebei, China, in which Sercel acquired a 51% equity stake in 2004, and through Sercel Junfeng's subsidiary
Xian Sercel Petroleum Exploration Instrument Co. Ltd ("Xian Sercel"), which Sercel previously owned jointly with BGP and acquired full
ownership of in November 2010. In addition, four sites in France (Toulouse, Les Ulis, Toulon and Brest) are dedicated to borehole tools,
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marine sources and submarine acoustic instrumentation, respectively.


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Total Equipment activities accounted for 28% of our consolidated operating revenues in 2010 and in the six months ended June 30,
2011.
We estimate that Sercel's market share in the seismic equipment market was approximately 60% as at both December 31, 2010 and
June 30, 2011.
Industry Conditions
Overall demand for geophysical services and equipment is dependent on spending by oil and gas companies for exploration, production
development and field management activities. This spending depends in part on present and expected future oil and gas prices and the ability
of our customers, particularly the small independent oil and gas companies, to secure financing for their projects. On the seismic supply side,
decisions for capacity adjustments are based on estimates of demand for seismic services in the coming months (for land crews) or in the next
two to three years (for marine seismic vessels). As a result, the supply and demand balance in seismic services is affected by decisions that
were made up to three years earlier. These decisions are based on projected demand and companies' actual expense levels for the exploration
of oil and gas. In this context, we believe that the short-term outlook for the geophysical services sector, particularly the marine segment, is
characterized by a continuing recovery in demand that will eventually satisfy the current market overcapacity and trigger a price increase. We
also believe that this continuing recovery in demand will sustain the current investment level in seismic equipment. Our short-term outlook is
based on the following market analyses:

· The strong recession experienced in geophysical services from mid-2008 to the end of 2009 led to a significant decrease in volume
and prices, resulting in an overcapacity in marine and land seismic markets. At the end of 2009, there were clear signs that oil and
gas companies would increase their exploration expenses, which would trigger a rebound in demand. Most seismic companies then
accelerated the launch of new capacities or released vessels that had been removed from operation to anticipate the beginning of a
new growth cycle. The Deepwater Horizon platform disaster in April 2010, which resulted in a huge oil spill in the Macondo oil

field in the Gulf of Mexico, has severely reduced the demand for seismic studies in this part of the world. Demand in marine
seismic grew elsewhere as expected, but not enough to offset the reduction in the number of vessels operating in the Gulf of
Mexico. Consequently, a sustained imbalance between supply and demand continued through 2010 and prices stayed flat.
Similarly, land seismic demand rebounded but without any effect on prices. This growth in volume has nevertheless benefited the
equipment sector, both for marine equipment (with new vessels released into the market and upgrades of old vessels), and for land
equipment (with an overall increase in the average number of channels per crew for denser acquisitions).

· In 2011, we expect that oil and gas companies, supported by sustained higher oil prices, will continue to grow their exploration and
production expenses with a stronger emphasis on exploration, leading to increased demand for both marine and land seismic
surveys. In marine seismic, we expect that the current overcapacity will begin to decrease in the second half of the year. We expect

that the land seismic market will stay vigorous in our key regions, including in winter in North America. We believe that
processing, imaging and reservoir activity will benefit from the global increased activity in marine and from subsalt or sub-basalt
offshore exploration. Multi-client activity will continue to be closely linked to the schedule of the bid rounds, and to the evolution
of new regulations and issuance of permits in the Gulf of Mexico.
In the longer term, we believe that the outlook for both the geophysical services sector and the geophysical equipment segment is
fundamentally positive for a number of reasons:

· First, oil and gas companies (including both international and national oil companies) and the large oil and gas consuming nations

have perceived a growing and potentially lasting imbalance between reserves and future demand for hydrocarbons. A rapid rise in
world consumption requirements,


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particularly in China and India, resulted in a higher growth in demand for hydrocarbons than had been anticipated, despite the
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Form 424B3

recent economic downturn. In response to this growth, we expect that oil and gas companies will continue to increase their
exploration and production investments in order to improve existing reservoir and regularly replace reserves.

· Second, we expect that the seismic services market will continue to benefit from this increased spending because seismic services
are key components in both the search for new reserves (pure exploration (early cycle)) and the optimization of existing reservoirs

(reservoir development, management and production (late cycle)). Significant technological developments in seismic equipment
and services over the last decade have advanced the use of seismic technology in reservoir development and production,
broadening its use over the lifecycle of reservoirs.
Each year, three to four million barrels of new oil have to be found in order to offset the declining rates of the existing reserves, and as
such, in deeper and more and more complex geology. Gas production from shale rocks, where seismic studies are used to enhance the yield,
has developed remarkably well in North America, and may expand to other continents. We expect these fundamental trends to continue to
drive increased demand for high-end seismic equipment and services in the medium-term. We believe that we are in a strong position to
benefit from these trends.
Our Strategy
We intend to continue to strengthen our competitive position in the global geophysical services and equipment markets by capitalizing
on growth opportunities resulting from both the application of new technologies in every sector of the oil and gas business (from exploration
to production and reservoir management) and from our worldwide presence.
To achieve this objective, we have adopted the following strategies:
Actively respond to the current market environment.
The volatile and adverse global market and economic conditions commencing in late 2008 and the decreased level of capital
expenditures by oil and gas companies adversely affected demand for seismic products and services in 2009. Demand started to recover in
2010 as exploration expenses of oil and gas companies began to increase again. In response to market conditions, we focused on reducing
costs across the organization. We adjusted our fleet capacity by decommissioning and removing vessels in 2009 and 2010 and by postponing
to 2010 and 2011 the deliveries of the new builds ordered in 2007. In addition, to meet current and future market demand, in particular for
increased streamers per vessel, we upgraded one vessel in 2010 and two vessels in the six months ended June 30, 2011. We plan to upgrade
one additional vessel in 2012. See "Services -- Marine Business Line -- Marine Seismic Acquisition Fleet" contained in Item 4 of the
Company's Form 20-F for the year ended December 31, 2010 dated April 21, 2011.
In addition, we are taking a disciplined approach to capital spending in order to focus on our priority of free cash flow generation. We
stabilized capital spending on our multi-client library in 2010 at a level that we plan to maintain in 2011. We are also maintaining strong
research and development spending levels and further increasing our focus on leadership in advanced technology.
Focus on growth areas for geophysical services.
We believe that our proprietary equipment and software provide us with a competitive advantage in specific growth markets, such as data
acquisition in transition zones and difficult terrain, where recent technological advances have made seismic acquisition more feasible. We
intend to focus on developing our technological


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capabilities in emerging markets for geophysical services, such as reservoir appraisal and production monitoring. We also believe that we
have unique experience and expertise in complex land seismic acquisition projects in both desert and arctic regions. Furthermore, we believe
our geographic footprint will allow us to respond to the growing demand for seismic imaging and reservoir solutions.
We also intend to maintain our position in the marine and land seismic market for multi-client data by developing our multi-client data
library. We believe that a strong position in this market segment enhances our global competitive position and may provide opportunities for
continuing future sales. In developing our multi-client data library, we carefully select survey opportunities in order to maximize our return on
investment. We also intend to apply the latest advances in depth imaging technology to a selected part of our existing library.
Given the growing importance of geophysics in reservoir characterization, we intend to further develop the synergies between our data
processing and reservoir services. This approach places us in a better position to meet the requirements of our clients with an extensive range
of integrated services. With the increasing use of wide-azimuth and high resolution surveys and the growing demand for advanced imaging
capabilities, we also intend to increase our processing capability in developing disciplines, such as reservoir description and monitoring,
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Form 424B3
including wide-azimuth, multi-component and 4D studies. We also plan to continue promoting and developing our dedicated processing
centers within our clients' offices and developing our regional centers. We opened our thirteenth dedicated processing center in September
2010 for Maersk Oil in Copenhagen.
We also intend to set up targeted partnerships through joint-ventures (JVs) in order to address specific market segments or to gain a
privileged access to high potential local geographical markets. These include a JV with Gardline in the site survey segment established in
May 2010, a JV with Petrovietnam Technical Services Corporation (PTSC) for the Vietnamese offshore market announced in December
2010, a JV with PT Elnusa Tbk (Elnusa) for the Indonesian offshore market announced in February 2011 and a JV with JSC Geotech Holding
(Geotech) for the Russian offshore market announced in February 2011.
Develop technological synergies for products and capitalize on new generation equipment.
We believe Sercel is the leading manufacturer of land, marine and subsea geophysical equipment. We plan to continue developing
synergies among the technologies available to Sercel and to capitalize fully on our position as a market leader. Through our research and
development, we seek to improve existing products and maintain an active new product development program in all segments of the
geophysical equipment market (land, marine and ocean-bottom).
Develop and utilize innovative technology.
The significant technological developments in seismic services over the last decade have produced a marked change in the sector. The
development of 4D and wide-azimuth techniques (providing time lapse views and enhanced illumination of the reservoir as well as improved
image resolution) now allows operators to better locate and monitor reservoir performance. This possibility broadens the use of seismic
techniques from pure exploration (early cycle) into a tool for reservoir development, management and production (late cycle). Importantly,
these techniques require more vessel time than traditional data acquisition. For example, three to six times more vessel time is required to
shoot wide-azimuth data than is required for traditional 3D.
Launching BroadSeis was our main technological event in 2010. This technique improves considerably the quality of data acquired by
streamers by widening the range of recorded frequencies. When less attenuated, low frequencies allow for clearer images much deeper into the
earth, whereas high frequencies enhance the image resolution at a level never attained before. BroadSeis relies on the combination of three
differentiation factors developed by us: (i) the Sercel solid streamer, the most quiet in the market; (ii) an original acquisition set-up based on a
specific positioning of streamers at variable depth in water; and (iii) innovative processing algorithms


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that are adapted to this specific acquisition configuration. Patent applications have been filed for the different components to ensure we
maintain exclusive rights over this technique. Around ten test acquisitions were carried out in 2010, most of them in association with
customers, which we believe indicates a real interest for this new technology. The industrialization phase of BroadSeis will now enable us to
quickly expand the use of this process, which will be a key differentiation factor for our marine acquisition business in 2011.
We believe that growth in demand for geophysical services will continue to be driven in part by the development of new technologies.
The industry is increasingly demanding clearer seismic imaging and better visibility, particularly underneath salt layers. We expect multi-
azimuth, wide azimuth, multi-component (3C/4C) surveys and time-lapse (4D) surveys to become increasingly important for new production-
related applications, particularly in the marine sector, and expect specialized recording equipment for difficult terrain to become more
important in land seismic data acquisition, particularly in transition zones, shallow water and arctic areas. We believe that to remain
competitive, geophysical services companies will need to combine advanced data acquisition technology with consistently improving
processing capacity in order to reduce further delivery times for seismic services.
Our strategy is to continue our high level of investment in research and development to reinforce our technological leadership. We also
intend to take advantage of our full range of integrated services to enhance our position as a market leader in:


· land and transition zone seismic data acquisition systems and know-how;


· innovative marine and seabed acquisition systems and services;


· seismic data processing and reservoir services; and


· manufacturing of land, marine and subsea data acquisition equipment.
Emphasize client service.
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