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Input/Output, Inc. has recognized the
need for high quality, high resolution data and has developed new digital sensors to replace
conventional analogue sensors
Technology
Scientific & Technical Instruments
(IO - NYSE)
Input/Output, Inc.
Robert Peebler
President and
Chief Executive Officer
Interview conducted by:
Lynn Fosse
Senior Editor
CEOCFOinterviews.com
July 2003
Input/Output Inc. (IO - NYSE) is a major provider of
seismic equipment and acquisition imaging technology for land, marine, transition zone
exploration, production and reservoir monitoring. The company specializes in technology
that creates value for the energy industry in the areas of 2D, 3D, 4D and multicomponent
seismic data.
Input/Output Inc. is an industry leader in the design
of seismic data acquisition system technology and the only independent manufacturer to
provide a complete portfolio of equipment for seismic surveys. I/O’s products –
recording systems for use on land, in the transition zone and offshore, and associated
energy sources, positioning systems, receivers, cables and connectors – are deployed
throughout the world, where geoscientists record seismic data to locate and characterize
oil and gas deposits. I/O is adding to its tradition of delivering customer value through
technology by focusing its research and development efforts on increasing channel count
capabilities, integrating radio and cable telemetry, developing light-weight sensing
equipment, integrating seismic design for multicomponent imaging, and integrating
pre-processing and post-processing software capabilities in the data acquisition workflow.
Discussing the seismic industry and Input/Output’s position, Mr.
Robert Peebler, president and CEO of Input/Output Inc. states, “I think we are right at the beginning of the third wave; we went
from 2-D to 3-D and now to the third wave, which we call vector full-wave. VectorSeis is
one big change as you are moving from recording with an analogue sensor to a digital
sensor. More importantly, we have full-wave, which includes another acoustic measurement
called shear seismic. I believe that it is a combination of that new information and data
that will solve a lot of the problems that we currently have, which we must solve in order
to find oil and gas. These problems are all the way from better resolution, to being able
to identify reservoir fluid types and lithology types. It is getting harder to find oil
and gas, so you have to solve more complex problems to do that. I would say that the
vector full-wave, including multicomponent seismic, is about where 3-D was in the early
eighties. At that time, about 98% of the data being collected was still 2-D, and you had
seismic contractors going broke as well as too much data in the data libraries. Companies
did not understand 3-D; they thought it was too complex and did not know how to interpret
it. The beauty of Input/Output is that we have invested well over fifty million dollars
and are approaching a hundred million on this next generation digital sensor. Right at the
heart of this third wave is the measurement itself. As a company, we have a technology
that will indirectly be responsible for finding billions of dollars of reserves in the
future. We have to decide how to take that technology and create value propositions around
it, including new equipment sales and potential services and things we could do with it,
to participate in that value creation and make sure we extract the proper amount of value
from what we bring to the party. That is the challenge that we are sitting with and the
kind of challenge I enjoy.” Addressing the issue of reaching
customers, Mr.Peebler comments, “I/O
has historically been an equipment manufacturer and supplier selling to seismic
contractors. If you look at our marketing and sales, it is really just seeing the world
through the eyes of the contractor. We still have to do that because the contractor has
issues of cost and liability and performance and all those things; all the way from having
marketing programs that are directed at educating the potential oil company customers, to
opportunities to sell directly to them in some areas. There is an emerging new area, which
is primarily in marine, where people are looking at installing permanent sensors on the
sea floor. The purpose of those sensors is to monitor the fluid flow in the reservoir. As
they produce these reservoirs, fluids are flowing through them, but the reservoirs are not
homogeneous or heterogenous so the fluid does not flow evenly. You end up with large
pockets that are not drained because of permeability barriers and various things. If you
can see that on an image, you can decide whether to drill another well or change
production on another well. We think that is going to happen at the beginning for very
large fields and parts of new developments. Today that is not the business of seismic
contractors. We do not see any reason why we should not go directly to oil companies and
participate in better understanding their needs and working with them to provide those
services direct. That is a new and emerging as well as a long cycle business, but we are
currently engaged with a couple of clients and having those discussions. We will be
participating in and getting some of our sensor technology into those projects.”
Mr. Peebler tells us that I/O has “new technology
that we can build new offerings around. We are positioning for a five to twenty year run
again.” And, “Potential investors looking at
the company should not see it as just an equipment supplier. They need to put it into the
context of what is going on in geophysical imaging. The oil and gas business is driven by
technology. Seismic imaging is right at the heart of finding oil and gas. Even though the
seismic contracting business has hit a tough time, the demand for oil and gas is still
going to go up about 50-60% over the next 15-20 years, even with all the alternate energy
sources coming on. Seismic imaging is going to be a critical technology going forward.
People who have that technology will be well positioned. Potential investors should put it
into the context of the industry and what technologies drive the industry, and they will
see it as a real opportunity.”
The Company has aggressively restructured to meet current and expected market conditions
while remaining focused on commercializing new technology that will address
customers’ most critical value drivers. Despite these dramatic circumstances and
challenges, the Company is positioned as a more efficient organization, better capable of
delivering new technologies to the worldwide energy industry. I/O continues to devote
substantial resources to research and engineering. I/O’s vision is to provide
industry-leading seismic products, solutions and services that enable better, more
cost-effective exploration and field development decisions. I/O continually focuses its
technology on improving the quality and resolution of images obtained from seismic data.
Forward Looking Statements: The information contained
in this interview contains forward-looking statements relating to the trends in the
seismic industry and developments of the company’s products, services and future
operating results. Statements contained herein are subject to certain risks and
uncertainties that could cause actual results to differ materially from those projected.
The words “believe,” “expect,” “intend,” anticipate,”
variations of such words, and similar expressions identify forward-looking statements, but
their absence does not mean that the statement is not forward-looking. These statements
are not guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict. These risks are discussed more fully in
I/O’s filings with the Securities and Exchange Commission, which are publicly
available at www.sec.gov or www.i-o.com. Readers are cautioned not to place undue
reliance on these forward-looking statements. Each individual should perform an
independent analysis before investing. The information contained herein is neither an
offer nor a solicitation to buy any of the company contained herein. Investing in
securities is speculative and contains a high element of risk.
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Input/Output Introduces Cable Version of
VectorSeis System Four
HOUSTON, TEXAS (June 2, 2003)… Input/Output,
Inc. (NYSE: IO) announced today the commercial release of the cable version
of VectorSeis ® System Four™, a
technology breakthrough in seismic data acquisition systems and the second in a family of
I/O VectorSeis systems.
Posted: 7/10/03 - CEOCFOinterviews.com
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Geofizyka Torun and Input/Output Announce Sale of
VectorSeis System Four
Torun,Poland and Houston,Texas (June 2,2003)— Geofizyka Torun and Input/Output,
Inc. (NYSE:IO) today announced the sale to Geofizyka Torun of an Input/Output
2,100 channel VectorSeis ® System Four ™ for land seismic acquisition.
Posted: 7/10/03 - CEOCFOinterviews.com
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