ION Geophysical soars on ION-BGP joint venture

NEW YORK — Shares of ION Geophysical Corp., which generates diagrams of crude oil and natural gas deposits for exploration companies, soared Monday when it announced a global joint venture that will dramatically cut its debt.

ION and BGP Inc., the world's largest land seismic contractor, will jointly provide seismic data on land-based petroleum prospects, ION said late Friday.

BGP will contribute $175 million for a 51 percent stake in the joint venture and a 16.7 percent interest in ION. The China-based company also will provide $40 million in bridge financing for ION.

The deal means ION of Houston will cut its long-term debt, and have more than $100 million in liquidity from cash and spare capacity on its revolving line of credit.

Barclay's Capital analyst James C. West reiterated his "Overweight" rating on the shares and raised his price target to $8 from $6.

West also raised his 2010 earnings-per-share estimate to 40 cents from 15 cents. Analysts polled by Thomson Reuters expect, on average, earnings of 10 cents per share next year.

In midday trading, shares of Ion Geophysical jumped $1.17, or 33.1 percent, to $4.71.