throbber
1599
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
`
`09-CV-1827
`Houston, Texas
`
`7:30 a.m.
`July 30, 2012
`
`*
`*
`
`**
`
`***
`
`WESTERNGECO LLC
`VS.
`ION GEOPHYSICAL
`CORPORATION, FUGRO
`GEOTEAM, INC., ET AL
`
`JURY TRIAL
`Volume 6
`Morning Session
`BEFORE THE HONORABLE KEITH P. ELLISON
`UNITED STATES DISTRICT JUDGE
`
`APPEARANCES:
`FOR THE PLAINTIFF:
`Lee L. Kaplan
`SMYSER, KAPLAN & VESELKA, LLP
`700 Louisiana, Suite 2300
`Houston, Texas 77002
`713.221.2300
`
`Gregg F. LoCascio
`KIRKLAND & ELLIS LLP
`655 Fifteenth Street Northwest
`Washington, DC 20005
`202.879.5290
`
`Sarah Tsou
`Timothy K. Gilman
`KIRKLAND & ELLIS LLP
`Citigroup Center
`153 East 53rd Street
`New York, New York 10022
`212.446.6435
`
`Johnny C. Sanchez, RMR, CRR - jcscourtreporter@aol.com
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 1
`
`

`
`1600
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`FOR ION GEOPHYSICAL CORPORATION:
`David L. Burgert
`Susan Kopecky Hellinger
`Jonathan M. Pierce
`Jonna N. Stallings
`Ray T. Torgerson
`Eric D. Wade
`PORTER & HEDGES LLP
`Reliant Energy Plaza
`1000 Main Street, 36th Floor
`Houston, Texas 77002
`713.226.6694
`
`FOR FUGRO GEOTEAM, INC.:
`Gordon T. Arnold
`Jason A. Saunders
`Anthony Hong
`ARNOLD KNOBLOCH LLP
`4900 Woodway Drive
`Suite 900
`Houston, Texas 77056
`
`James M. Thompson
`ROYSTON RAYZOR VICKERY & WILLIAMS LLP
`Pennzoil Place
`711 Louisiana Street, Suite 500
`Houston, Texas 77002
`713.890.3218
`
`Court Reporter:
`Johnny C. Sanchez, RPR, RMR, CRR
`515 Rusk, #8016
`Houston, Texas 77002
`713.250.5581
`Proceedings recorded by mechanical stenography. Transcript
`produced by computer-assisted transcription.
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`Johnny C. Sanchez, RMR, CRR - jcscourtreporter@aol.com
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 2
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`

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`I N D E X
`
`WITNESS
`ROBIN WALKER
`
`1601
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`PAGE
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`DIRECT EXAMINATION BY MR. LOCASCIO............. 1606
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`CROSS-EXAMINATION BY MR. TORGERSON............. 1703
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`WESTERNGECO Exhibit 2078, pg. 3
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`1605
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`THE COURT: You may.
`MR. LOCASCIO: Thank you. WesternGeco calls
`Robin Walker as its next witness.
`THE COURT: Okay. Mr. Walker, if you could
`make your way up here. If you could raise your right hand,
`Mrs. Loewe will administer the oath.
`CASE MANAGER: Do you solemnly swear that the
`testimony you are about to give in the matter before the
`Court will be the truth, the whole truth and nothing but
`the truth?
`
`THE WITNESS: I do.
`THE COURT: Make yourself as comfortable as you
`can. Do speak directly into the mike, if you would.
`THE WITNESS: Thank you.
`MR. LOCASCIO: Robin Walker is WesternGeco's
`director of marketing and vice-president of sales. He
`began his job with the company in 1985 and has been in
`various sales and marketing roles with WesternGeco ever
`since. His involvement with the Q-Marine system started in
`1993 while he was the marine marketing and technique
`manager. WesternGeco calls Mr. Walker to explain the
`development of Q-Marine from a marketing and sales
`perspective, as well as discuss the lateral steering
`marketplace and how it has been impacted by ION and Fugro's
`infringement.
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 4
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`

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`Direct-Walker/By Mr. LoCascio
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`1606
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`ROBIN WALKER,
`after having been first cautioned and duly sworn, testified
`as follows:
`
`DIRECT EXAMINATION
`
`BY MR. LOCASCIO:
`Good morning, Mr. Walker.
`Q.
`A.
`Good morning.
`I gave a little bit of your background, but not to
`Q.
`cut it short, can you tell the jury if you have any
`degrees and where from?
`A.
`Yes. I have a bachelor's in geology from the
`University of London in 1980.
`And in your role as director of marketing and
`Q.
`vice-president of sales, can you explain to the jury your
`responsibilities, sir?
`A.
`Yes. So I have three real responsibilities: I have
`to -- responsible for the revenue. So WesternGeco's
`revenue is about -- last year, it was $2.2 billion out of
`a market of 11.5 billion. And I have to run the sales
`team, sales and marketing team. They're in three groups.
`It's a total of 135 people.
`And most importantly, I have to work with
`customers, engage with customers, to find out what they
`want, what they need and what they're planning to do.
`Thank you, sir.
`Q.
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 5
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`

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`Direct-Walker/By Mr. LoCascio
`
`1607
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`Can you explain how you and your team
`engage and interact with your customers?
`A.
`Yes. So we have several ways where we engage. We
`have formal ways. Some of our -- mainly one of the teams
`is the global account managers, and they look after our
`top 20 accounts. And we engage with those. I manage my
`colleagues. Our management team and the customers'
`management team have a annual review. And there we will
`review the projects we've done, the -- what their projects
`are planning to do and technology needs and business
`issues. So that's one.
`We engage at trade shows. We have -- there
`are two major trade shows for our industry: One in the
`U.S., one is somewhere in Europe. And we'll have a lot of
`engagement with customers around there.
`We have a lot of one-on-one meetings,
`technical meetings. I still do technical presentations. I
`love it. Technical meetings, business meetings, around the
`sale cycle and separate to that. So we keep close. And a
`lot of these people I've been -- since 1985 been dealing
`with customers, so long, we've grown old and gray together.
`So deal with them.
`And then, of course, there's the formal
`tender process where we bid for work and respond, and
`that's -- that's very formal and a less open engagement,
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 6
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`

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`Direct-Walker/By Mr. LoCascio
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`1608
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`but that's very important.
`Thank you.
`Q.
`
`Do you, sir, from your experience with
`customers, believe there's a need for lateral steering in
`your industry?
`A.
`I do, yes, absolutely.
`When was the first time you saw that need?
`Q.
`A.
`So I saw it when -- when I was in the Far East you
`mentioned, I went to Oslo to do the marine marketing
`technique role. Before that, I was in the Far East, and I
`saw there was a real need for surveys to be more cost
`effective and so they need to be better quality. And that
`was one way of doing that.
`When you moved to WesternGeco or Geco-Prakla, was the
`Q.
`company already working on that project?
`A.
`When I moved to Oslo, we -- well, I moved to
`Stavanger, the group is -- the engineering group was in
`Oslo, yes, it was already underway.
`And after you were in Stavanger, what was your next
`Q.
`role with the company?
`A.
`In 1998, I followed Q-Marine and the other stuff we
`were doing up through until '98, and then '98, I moved to
`Houston, here, had three lovely years in Houston, really
`enjoyed it, and I was the manager of geophysics and
`marketing at that stage.
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`WESTERNGECO Exhibit 2078, pg. 7
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`

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`Direct-Walker/By Mr. LoCascio
`
`1609
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`And did you have any interaction with Q-Marine when
`Q.
`you were here in Houston?
`A.
`Yes, I did. We normally -- it was going to go into
`its initial testing in the wet testing, in-the-water
`testing, and we normally do that in the North Sea. But
`since it had been my baby, I said, rather I want to do it
`in the Gulf of Mexico. So I was engaged with it on two
`tests here.
`And what did you do after that?
`Q.
`A.
`So after that, WesternGeco was formed right at the
`end of 2000, and then I moved to the London office,
`Gatwick, where I became the market research manager.
`At some point did you ever have responsibility for
`Q.
`Q-Marine as a whole?
`A.
`Yes. So we introduced Q-Marine and Q-Line which is
`land system, around the same time, Q-Line slightly earlier
`in 2001. And by 2004, the company decided we needed to
`have one person to look after all of that business and
`make sure it grew right, so I was appointed to that role
`in 2004.
`I hand you binder some of exhibits. Also a cup in
`Q.
`case you need that with water.
`A.
`Thank you very much.
`Yes, sir. Before we look at a few exhibits, I want
`Q.
`to ask you at a high level, can you explain how you see
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`WESTERNGECO Exhibit 2078, pg. 8
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`

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`Direct-Walker/By Mr. LoCascio
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`Q-Marine, what it consists of and how it works?
`A.
`Yes. Of course. So it's got four parts, it's got
`the lateral steering, that puts the streamers where you
`want them to be, it's got the acoustic full brace acoustic
`network, that tells the streamers where they are, and it's
`got what we call calibrated marine source, that controls
`the quality of the energy, we put into the earth, and it
`has the single sensor streamer, which is used to get rid
`of the noise.
`Is one of those a primary feature or the primary
`Q.
`feature of Q-Marine?
`A.
`The one our customers want is lateral steering.
`And how do you know that?
`Q.
`A.
`Because that's the one they keep asking for in
`quotes. And in the informal engagement to a big extent.
`Why is it that your customers put the most value on
`Q.
`lateral steering?
`A.
`Because it speeds up projects, it makes them more
`efficient, and it allows to improve data quality, so you
`can't really operate with streamers close together when
`they're very long, so you need to have lateral steering
`and then they will just -- streamers be closer together,
`and that's allows better quality.
`How does the streamer spacing -- is that the word you
`Q.
`used?
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`

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`1611
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`Direct-Walker/By Mr. LoCascio
`
`A.
`Spacing, yes.
`How does the streamer spacing improve quality?
`Q.
`A.
`Well, you want your sampling of the earth because
`doing this 3D sampling of the earth, you want the size of
`each little cube of earth you're investigating to be as
`small as possible, and if your streamers a long way apart,
`then your bits of earth it's like that big, you want them
`to be smaller the only way to bring that smaller is to
`have your streamers closer together.
`Was there a typical streamer spacing that the
`Q.
`customers used or sought before they were able to steer
`the streamers laterally?
`A.
`Pretty much everything was a hundred meters. That's
`the length of a football field.
`Between each streamer?
`Q.
`A.
`Between each streamer, sideways yeah.
`Between lateral steering and Q-Marine product have
`Q.
`you been able to offer narrower spacing in those
`streamers?
`A.
`Yes. We've done 75 meters, we've done 50 meters. So
`half a football field on a lot of projects. We did one at
`37 and a half, that was a bit hairy.
`With streamers that are 5 or 6 kilometers long are
`Q.
`you able to do 50 or 75 kilometers -- pardon me -- 50 or
`75-meter spacing safely without lateral steering?
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`WESTERNGECO Exhibit 2078, pg. 10
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`

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`1612
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`Direct-Walker/By Mr. LoCascio
`
`A.
`Yeah.
`Without lateral steering?
`Q.
`A.
`Sorry. Without lateral steering, no, it's -- a
`hundred meters is fine, but if you need, with lateral
`steering, with lateral steering, it works, yes.
`THE COURT: Does anybody ever ask that lateral
`steering not be included for any reason?
`THE WITNESS: Since about 2006, 2007, it's
`either they explicitly ask for it or it's silent. I've
`never seen anyone say: We actually don't want it.
`THE COURT: Okay. And going back to your
`introduction of yourself, where are you now working, sir?
`THE WITNESS: So now I'm still in the Gatwick
`office, which is our headquarters.
`THE COURT: All right. Thank you.
`THE WITNESS: Yeah.
`BY MR. LOCASCIO:
`Can you give the jury a relative -- an idea of the
`Q.
`relative magnitude of the Q-Marine project?
`A.
`It was the biggest project we were doing in
`engineering. The engineering center in Oslo covers land
`marine systems, if you like, and it was by far the biggest
`project going in Oslo at the time.
`Was this something that was viewed as a easy one to
`Q.
`decide it was going to be a guaranteed winner?
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`

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`1613
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`Direct-Walker/By Mr. LoCascio
`
`A.
`No. It was -- it was a gamble. When it came out,
`the CEO talked about Q technology as being his hundred
`million-dollar gamble.
`Why is that?
`Q.
`A.
`Because over all, that's what we'd invested in the
`technology and we didn't know if it would, the market
`would accept it.
`And why did you think there might be some lack of
`Q.
`acceptance by the marketplace?
`A.
`The industry is a little conservative. These
`projects are very, very important, and they're very big, a
`typical 3D seismic, it could be five, 10, $20 million even
`then, now that we do big surveys, it could be a million
`dollars easily. And if it didn't work, then you could end
`up with the things all ending up a massive pile of
`spaghetti, customers a little bit show me that it works
`and then I'll buy into it, which we understood, that's
`part of what we do.
`You indicated the engineering development side of
`Q.
`bringing Q-Marine to the market was a hundred
`million-dollar gamble was described as, do you know the
`exact breakdown of where those funds were or how it breaks
`down?
`A.
`No, I don't. The lateral steering was a big part of
`it, but that was, it over all -- I found the reference the
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`WESTERNGECO Exhibit 2078, pg. 12
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`

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`Direct-Walker/By Mr. LoCascio
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`1614
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`other day. It was over all Q technology. So there was a
`little bit on the land side and the single sensor was
`shared and the rest was marine. I don't have a breakdown,
`I'm afraid.
`Were there essential funds necessary to get it
`Q.
`through market accepted after that initial hundred million
`dollars?
`A.
`Yeah, that was -- the hundred million was like a
`entry ticket really because we had to put it into the
`water, put it out, do projects for customers and do -- and
`prove to customers that it worked, that we wouldn't end up
`with more tangles -- which might have happened -- and it
`actually gave the quality that it did. So we did a couple
`of multiple client projects which were...
`The jury's heard a lot of things. I don't think
`Q.
`they've actually heard about a multi-client job. Can you
`very briefly just explain what that is?
`A.
`Okay. Sorry. So a multi-client job, a normal
`proprietary job the company commissions us to shoot a
`survey. And we give them the -- provide the data. A
`multi-client job project we invest our own money in a
`survey. For example, in the Gulf of Mexico we have
`projects going on right now. And we spend our money to
`invest in the survey, and then customers license the data
`and as anyone who wants to can license that data, and just
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`

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`Direct-Walker/By Mr. LoCascio
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`1615
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`as much or as little as they want, the whole survey or
`just one block, and then for a fee. So it's a different
`business model.
`You indicated that there was a demand for lateral
`Q.
`steering both for better quality surveys as well as more
`efficient or faster surveys. The jury has heard a little
`bit about that. Can you briefly explain the key benefits
`from your perspective in those two areas?
`A.
`Yes. So, faster, more efficient surveys with lateral
`steering, you can, first of all, what we call mobilize,
`which is put the kit into the water quicker because you
`can stern out, and then you can line up and you have -- if
`you can steer your streamers and control them then you get
`less infill, which you mentioned in the opening this thing
`about little bits of grass left.
`That one I think the jury has heard a lot about.
`Q.
`A.
`Right. Okay. And then on doing the line change when
`you're doing kind of a hand-brake turn but with a big
`spread, these -- a seismic spread is the biggest moving
`thing on the earth, so it may be a half a mile wide and
`four or five miles long, and you want to turn it around as
`quickly as possible because we don't make money turning
`around, we make money shooting data. So you have to turn
`around and then those streamers have to be absolutely
`straight before you fire your first shot.
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`Direct-Walker/By Mr. LoCascio
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`1616
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`So it steers them around and snap them
`straight, so it saves a lot of time there. And that cuts
`down the project duration.
`Is survey repeatability spreadsheet something that's
`Q.
`also valuable from your perspective?
`A.
`That's very valuable.
`The jury has heard about 4D, but you've got a
`Q.
`demonstrative in there that --
`A.
`Yes.
`Can we switch it? If you can briefly explain what
`Q.
`customers have told you about 4D and its impact on the
`marketplace.
`A.
`Right. So the idea of shooting 4D isn't new because
`as we develop technology, customers they might reshoot a
`survey anyway and do what we call accidental 4D, in other
`words, I've shot it, I'll reshoot it, I might as well look
`at the difference.
`But then in the early '90s, mid '90s, we
`started saying: Well, let's have a go at actually trying
`to do it deliberately. So this shows a 3D over a survey,
`a 3D survey over a field.
`Go to the next slide.
`Q.
`A.
`And the idea what we get out of good quality seismic
`are attributes, you know, here's what the rocks look like,
`here's what the geology looks like. And so, we can see
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 15
`
`

`
`Direct-Walker/By Mr. LoCascio
`
`1617
`
`here that there's a reservoir and we can see oil and water
`and gas and this is derived from the information we
`acquire.
`
`Now, if you go and reshoot that after a
`certain period of time, then of course the rocks haven't
`changed, the only thing that's changed is the fluid, and
`so, you've produced oil and you can see and highlighted
`areas is where the oil is produced from.
`Now, a reservoir it's not just a big tank
`full of oil, it's -- the oil is stuck in between in the
`pores between the sands and it's split up by faults and it
`splits and faulted and it's got little lithology changes.
`So for our customers to produce from a reservoir, they
`really need to understand all of this information. The
`only way they can do that is with seismic. And we don't
`necessarily know exactly if a fault is there, let's say
`here's a bit of reservoir and another separated by a
`fault. Well is oil going up that fault or not? We don't
`know. We don't know.
`So from the customers' the perspective, if
`it is, I can sit here and this will eventually drain. If
`it isn't, well, I've got to put a hole in here and drain
`it.
`
`So managing the reservoir, drilling in the
`right place, because they keep drilling it. It isn't --
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`Johnny C. Sanchez, RMR, CRR - jcscourtreporter@aol.com
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 16
`
`

`
`Direct-Walker/By Mr. LoCascio
`
`1618
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`you know, you develop a reservoir and it doesn't stay, it
`keeps changing. So that information what this highlights
`is, that is the area that's changed. And after a time --
`thank you.
`Go ahead.
`Q.
`A.
`Then you separate -- you take one volume, subtract
`the other and this is meant to come out and show up really
`clearly and concisely the way -- where I've drained and
`where I haven't drained.
`You mentioned that there were 4D surveys before
`Q.
`lateral steering. What's the big deal about it?
`A.
`Well, the -- the problem is we did a survey and we
`did a 4D survey for Statoil over at Ekofisk, not Ekofisk.
`Gofax.
`And that's a place?
`Q.
`A.
`Yeah, that's the field name -- and in the Norweigian
`section of the North Sea. You can Google it. It's still
`one of the textbook presented in number of technical
`papers. Gave a good result, but it was 10 years between
`the two surveys. And it had to be 10 years because you
`couldn't control that repetition. You had poor
`repeatability, so the 4D single if you like, had to be
`really loud so you can see it with clarity.
`You had to wait 10 years to see the difference
`Q.
`between the original formation and what happened?
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`Johnny C. Sanchez, RMR, CRR - jcscourtreporter@aol.com
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 17
`
`

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`1619
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`Direct-Walker/By Mr. LoCascio
`
`A.
`Exactly, yeah.
`Is 10 years a desirable amount of time to wait for
`Q.
`that 4D survey in the industry?
`A.
`No, it isn't. If you look at fields around the
`world, they are. Most fields, they are switched open, but
`most fields are in kind of terminal design by that stage.
`So a field will produce oil, and if we imagine it over
`time, it starts out like that and then it trails off.
`As the fresh decreases, becomes harder to
`produce. And there comes a point where they say, okay,
`we're done.
`
`And so, during that time to keep the
`production up, you want to inject water to increase
`pressure, whole bunch of stuff the oil companies do. If I
`can do a snapshot every two years, then I can do some
`redevelopment on that field, whatever I want to do, and I
`end up with a much greater production. In, fact because
`of 4D, the Norwegian government mandates that 50 percent
`of the oil in place should be produced from every
`reservoir in Norway. Around the world on average it's
`around 30 percent.
`And is that difference the ability to get a 4D image
`Q.
`in a two-year stretch, the contribution of lateral
`steering versus having to wait 10 years?
`A.
`It is. Absolutely it is, we couldn't do it before,
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`Johnny C. Sanchez, RMR, CRR - jcscourtreporter@aol.com
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 18
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`

`
`Direct-Walker/By Mr. LoCascio
`
`1620
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`just couldn't do it.
`What does it take to be able to get that image over a
`Q.
`shorter period of time?
`A.
`You have to be -- you have to repeat where your
`streamers are, so here's my streamers on the underlying
`survey and I want the new ones to be sitting right on top
`of the old ones.
`Does it -- is it essentially like having a better
`Q.
`camera?
`A.
`Yeah. That's the way of putting it. My daughter
`turned 20 a couple of weeks ago, and we always take
`birthday photos and line up with the criminals parade. So
`if I look back and when my daughter was 10, any -- a poor
`quality camera I can tell the difference, I know the
`difference. But if I want to look at a picture of my
`daughter at 19, the picture of my daughter at 20, picture
`of my daughter at 21, you need to line it up, take a
`picture in the good place, take a light, clothes won't to
`be same, fashions will change. But, you know, just on her
`fact I would tell the difference. But I would need a
`better quality camera. It's a camera. Yeah, it is.
`That's what doing. We're taking pictures of the
`reservoir.
`Did you have any personal experience with the efforts
`Q.
`to test Q-Marine for the marketplace?
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`Johnny C. Sanchez, RMR, CRR - jcscourtreporter@aol.com
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 19
`
`

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`1621
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`Direct-Walker/By Mr. LoCascio
`
`A.
`I did.
`Tell us about that.
`Q.
`A.
`So I said when I they moved me to Houston, I felt
`kind of cheated because this had been my baby, but it was
`good because I went out and the first thing we do is we do
`just a test of the equipment, really. We want to know
`that it will work. So we just put a streamer -- a single
`streamer in the water just to test it. And we test it, we
`could steer it and test that the electrics works and all
`the rest of it because posed a high risk. And normally we
`just do that in and we don't really get some data, but I
`had a, there was a customer worked for Kerr-McGee, who
`was -- who had a particular problem at that stage and we
`signed a mutual nondisclosure agreement and he told me
`about his problem, and I told him about something we were
`doing. So we actually went out and actually got a bit of
`money out of him to do that test.
`You mentioned Kerr-McGee. Is that an oil company?
`Q.
`A.
`That's an oil company, yes.
`Were there some companies that were earlier adopters
`Q.
`of this technology, once you launched?
`A.
`Yes. You always get an adoption cycle, some come on
`early. So the guy, Kerr-Magee, he went from the U.S. to
`Aberdeen and the first thing he did was phone up and
`commission a Q-Marine survey.
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`Johnny C. Sanchez, RMR, CRR - jcscourtreporter@aol.com
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 20
`
`

`
`Direct-Walker/By Mr. LoCascio
`
`1622
`
`I said I'd done a couple of surveys in the
`Gulf of Mexico. The second one was -- the first of that
`little multi-client project, which we didn't expect to
`sell, but it was over Shell acreage. And they loved it,
`the chief geophysicist at the time from Shell, Barbara
`Bone said this was a new start for the Gulf of Mexico, so
`it was really -- was fantastic. We were very pleased to
`get that.
`When was the product ultimately commercialized?
`Q.
`A.
`So it was commercialized in 2001, in the North Sea,
`and we had -- the first project was BP, they did a 4D, and
`then Statoil picked it up immediately. So Geco was a very
`Norweigian company. As I said, I'd been in Norway. So
`Statoil, which is the stage oil company in Norway, were
`very close.
`
`We told them what we were doing we told
`them a little bit about the technology, so they were
`really just waiting. And the moment we said okay now it's
`ready, they said right. We're going to go and try it.
`Was WesternGeco the first company in the market with
`Q.
`a lateral steering system for its streamers?
`A.
`Yes.
`And how long was WesternGeco the only company in that
`Q.
`market offering that technology?
`A.
`We were on our own until 2007 in the marketplace in
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 21
`
`

`
`Direct-Walker/By Mr. LoCascio
`
`1623
`
`business.
`During that time, were there WesternGeco customers
`Q.
`that developed a preference for using steerable streamers?
`A.
`Yes, there were a lot. I said Statoil had done the
`first project and then once they'd done it and they saw
`that we could control the streamers, then they said, okay,
`right, all 4D going forward, immediately, we want lateral
`steering on all of them.
`Shell used it, so we did a project in
`Malaysia in late 2001 to early 2002. And they were
`delighted because we just -- is this picture -- yeah, the
`picture is still up. One of the other things you can do
`with it if we -- customers have an irritating habit of
`having production facilities in a producing oil field, and
`they want us to be as close as -- they want us to get as
`close as we can to it.
`To the rig?
`Q.
`A.
`To the rig.
`Now, we normally steer our streamers to be
`straight. That's what you do. But you may say: All
`right. What I want to do because the vessel has a -- can't
`get that close to the rig because of safety concerns,
`absolutely right -- that you can actually deliberately
`steer your streamers sideways so that you can get coverage
`very near the rig, just by careful survey, planning and
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 22
`
`

`
`Direct-Walker/By Mr. LoCascio
`
`1624
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`careful operation, so they were interested in doing that,
`so they came onboard quite early.
`Are there other conditions at certain places of the
`Q.
`world that get a real benefit from this technology?
`A.
`Yes. There are areas where you've got a lot of
`currents, and the boats is going at four and a half knots,
`something like that, which is about five and a half miles
`an hour. And so, if you have a cross current, then your
`streamers are going to be pushed out sideways.
`Well, if they're regular, you can live with
`that, but if you have odd currents and you get odd currents
`maybe where you have a change in water depth, currents by
`the outflow of rivers, big rivers, particularly around
`Brazil, imagine what the Amazon water flow does, or in West
`Africa we have projects there. So that's an area you want
`to be able to steer them. There's another -- another very
`specialized area which is in the Arctic, because the
`shooting window in the Arctic is very short. You've
`obviously -- you've got to wait for the ice to break up.
`So if you can steer your streamers then even though there
`are icebergs floating around and you have to do some fairly
`hairy maneuvers, you can steer around them and you can get
`started. And you can add a month to your shooting window,
`and that's very, very important for our customers.
`Were there companies during this window after you
`Q.
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 23
`
`

`
`Direct-Walker/By Mr. LoCascio
`
`1625
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`launched Q-Marine that give direct awards to WesternGeco
`because you were the only ones that could offer this
`technology?
`A.
`Yes. We had lots of them. I said Statoil after the
`first survey. They gave us -- we had a five-year contract
`that was about 15 surveys, 15, 4D surveys. We had direct
`awards from Shell, direct towards from Total, direct
`awards from Chevron in the 2003 area.
`And we also had direct awards, quite big
`ones from ONGC for example, which is the National Oil
`Company of India. That was about $300 million, that was
`about three or four seasons work.
`We had direct awards from Petro Gas. They
`had a very complicated 4D, 3D, 4D they wanted. And a
`direct award from PEMEX, which is the Mexican National Oil
`Company for two seasons work, our vessel for a couple of
`years.
`Was it unusual for companies, particularly national
`Q.
`oil companies to award direct awards?
`A.
`Unheard of.
`Why?
`Q.
`A.
`Because they spend -- effectively they are spending
`taxpayer dollars, and so they have to be open and
`transparent and they do genuinely open public bids
`openings or everyone bids and they set quite often fairly
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`08:05:23
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`PGS v WESTERNGECO (IPR2014-00689)
`WESTERNGECO Exhibit 2078, pg. 24
`
`

`
`Direct-Walker/By Mr. LoCascio
`
`1626
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`low technical criteria, and then take the cheapest because
`it's the taxpayers' money they're spending, and they have
`to look after.
`
`But in these cases what they wanted to do
`they knew they needed lateral steering, so it was a direct
`negotiation. A fairly tough one, but it was direct.
`Due to your ability to be the only company offering
`Q.
`this patented technology, were yo

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