`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
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`09-CV-1827
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`Houston, Texas
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`7:30 a.m.
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`July 30, 2012
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`**
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`WESTERNGECO LLC
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`5 VS.
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`ION GEOPHYSICAL
`CORPORATION, EUGRO
`GEOTEAM,
`INC., ET AL
`
`JURY TRIAL
`
`Volume 6
`Morning Session
`
`BEFORE THE HONORABLE KEITH P. ELLISON
`UNITED STATES DISTRICT JUDGE
`
`APPEARANCES:
`
`15 FOR THE PIAINI'IFF:
`
`Lee L. Kaplan
`16 SHSER, KAPLAN & VESELKA, LLP
`700 Louisiana, Suite 2300
`17 Houston, Texas 77002
`713.221.2300
`
`18
`
`19 Gregg F. LoCasCio
`KIRKLAND&ELLISLLP
`20 655 Fifteenth Street Northwest
`Washington, DC 20005
`21 202.879.5290
`
`22
`
`Sarah Tsou
`23 Timothy K. Gilman
`KIRKLAND & ELLIS LLP
`24 Citigroup Center
`153 East 53rd Street
`25 New York, New York 10022
`212.446.6435
`
`VQPY
`
`
`
`lflTmY
`
`
`v;fg,‘1
`_~.;S.
`B“”’”Aw”’M"5"
`,
`
`Johnny C. Sanchez, RMR, CRR — jcscourtreporteI@aol.com
`
`WESTERNGECO Exhibit 2155, pg. 1
`PGS V. WESTERNGECO
`IPR2014-01475
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`WESTERNGECO Exhibit 2155, pg. 1
`PGS v. WESTERNGECO
`IPR2014-01475
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`
`
`Direct ~Walker/By Mr . LoCascio
`
`1634
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`1 Q.
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`If you turn to PTX 114.
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`2 A.
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`That's the one.
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`The 114 that's on the second page.
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`3 What's that?
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`956 reference. That's —— a bit small, but
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`if you look at the second paragraph.
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`M. LOCASCIO: Blow that up. Thank you.
`
`THE WITNESS:
`
`Zoom in on that.
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`Another example where Q—Marine's enhanced
`
`acquisition techniques is in maximizing subsurface coverage
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`3D surveys.
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`So this was —— this is actually a magazine
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`article.
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`It's a final draft which was sent for me for fact
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`approval. But it's a magazine article having to do with a
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`trade show.
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`And over the Marlim complex of fields
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`operated by Petrobras in Campos basin, heavily obstructed
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`area, known for unpredictable currents and sea states.
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`Innovative utilization,
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`remote source vessel, continuous
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`recording and streamer steering enabled subsurface
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`coverage.
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`So on that project, say it was a direct
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`award, we acquired it and they could tell from —— given the
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`quality of the data, which they'd never got before,
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`they
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`could see that there were actually two fields,
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`that the two
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`08:17:01
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`08:17:16
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`08:17:31
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`23 bits weren't actually connected.
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`And so,
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`that completely
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`24 changed their development plans for the second field.
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`08:18:02
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`25
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`MR. LOCASCIO: Dave, can you zoom out a second?
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`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.com
`
`WESTERNGECO Exhibit 2155, pg. 2
`PGS V. WESTERNGECO
`IPR2014-01475
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`WESTERNGECO Exhibit 2155, pg. 2
`PGS v. WESTERNGECO
`IPR2014-01475
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`Direct—Wal}<er/By Mr. LoCascio
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`1635
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`BY MR. LOCASCIO:
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`Q.
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`At the bottom left, it's sort of looks like there's a
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`Q video game.
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`Do you see that?
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`08:18:11
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`A.
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`Yeah.
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`Q.
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`Can you tell us about that?
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`A.
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`We have —— we do have fun sometimes. This —— we
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`wanted to get the —— find a way of getting the point over
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`to our customers, because this was still very new. And
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`08:18:25
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`so, we —— this was on the trade show floor for two or
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`three years, and we invited our customers to sit down.
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`And it's -— the graphics were fairly simplistic, but
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`behind it was —— we'd introduced the enhancement to Q
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`called "advanced spread control," and that really
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`automated and got these different modes.
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`So we had them steer the vessel through
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`some obstructions, around some obstructions, and they did
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`it twice.
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`The first time they did it conventionally, and
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`the second time we switched the streamer steering on and
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`they could get through the —— get through the
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`obstructions.
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`It proved to be very popular, and we gave
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`them —— there was a PS3 as a prize at the end of each day
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`for the highest score, and you basically started from
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`20,000 to down when you were offline.
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`There was interest because we had —— it
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`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.com
`
`WESTERNGECO Exhibit 2155, pg. 3
`PGS V. WESTERNGECO
`IPRZO14-01475
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`WESTERNGECO Exhibit 2155, pg. 3
`PGS v. WESTERNGECO
`IPR2014-01475
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`Direct—Walker/By Mr . LoCascio
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`1636
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`08:19:37
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`08:19:56
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`was great for us because the students all came along, but
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`the people who won it every day were the older people
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`because the students are doing this, and older people are
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`just a little bit more calm.
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`So they tended to win.
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`And
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`they said, PS3. What the hell am.l going to do with that?
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`Q.
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`Sir, was the technology behind the scenes, if you
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`will,
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`running this similar to the actual lateral steering
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`technology you used on the boat?
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`A.
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`It was exactly.
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`It was a massive computer actually
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`behind it. Didn't look very -— graphically that exciting.
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`No, it was exactly that.
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`So we put currents into it, and it behaved
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`exactly the way the streamers do behave in the real world.
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`So it was -— it was a bit of entertainment, but it was
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`OD\JO\LN¢>toB)F4
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`serious as well.
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`Q.
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`I want talk to you about other customer reactions.
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`If you can turn to PTX 94 in your binder.
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`Were there oil companies that believed
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`that lateral steering was critical to 4D efforts?
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`08:20:24
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`2O
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`A.
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`There were.
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`So this is —— this is a magazine article
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`08:20:43
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`for "Offshore Technology." And of course,
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`they phoned us
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`up and asked us for pictures, but we had no control over
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`what went into this one.
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`So you can't say you're not
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`going to do it.
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`1 was pleased when it came out.
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`So "Offshore Technology" is one that is used
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`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.com
`
`WESTERNGECO Exhibit 2155, pg. 4
`PGS V. WESTERNGECO
`IPRZO14-01475
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`WESTERNGECO Exhibit 2155, pg. 4
`PGS v. WESTERNGECO
`IPR2014-01475
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`Direct—Walker/By Mr. LoCascio
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`1637
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`08:21:01
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`for all our industry,
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`the oil industry.
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`So some of you
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`guys may be in the oil industry if we're in Houston. You
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`may read this magazine.
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`I don't know.
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`So to get a seismic article in "Offshore
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`Technology" was quite —— at the time quite unusual.
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`Anyway, yes, so it's ——
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`Q.
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`If you look at this top section --
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`MR. LOCASCIO: Dave, can we pull up this?
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`~JChCH¢>00B)P4
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`8
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`9 BY MR. LOCASCIO:
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`08:21:15
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`10 Q.
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`It says, "WesternGeco's marine seismic solution is
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`11 gaining acceptance among E&P companies for it's high
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`12 definition images and vast improvement in repeatability."
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`13
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`14 A.
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`Are the E&P companies the oil companies?
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`Yes.
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`The E&P stands for exploration and production.
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`08:21:32
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`15
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`I was very happy with that headline.
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`16
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`MR. LOCASCIO: And if you turn to the second
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`17 page. Dave, if you can flip.
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`18 BY MR. LOCASCIO:
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`19 Q.
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`There's a picture down here at the bottom that I want
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`08:21:42
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`20
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`to ask you about.
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`21 A.
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`Right.
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`22 Q.
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`Can you tell the jury what that is?
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`23 A”
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`Yes. This is a screen dump.
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`So on the boat,
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`the
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`24 navigators who are monitoring where everything is in the
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`08:21:54
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`25
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`instrument room are watching continuously where everything
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`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.com
`
`WESTERNGECO Exhibit 2155, pg. 5
`PGS V. WESTERNGECO
`IPRZO14-01475
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`WESTERNGECO Exhibit 2155, pg. 5
`PGS v. WESTERNGECO
`IPR2014-01475
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`Direct—Walker/By Mr. LoCasci'o
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`1638
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`08:22:14 '
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`kO@\TO‘\U'l»J>L;Ol\)}-‘
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`is. And we position everything so we know where it is.
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`So the convention on the left-hand side is
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`a screen dump.
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`It was a Q—Marine vessel, but we switched
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`the steering off. And this —— I wanted this picture.
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`Switch the steering off, and there was a
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`bit of a cross—current, and you can see where —— I think
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`that this was about the last shot point before we switched
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`the gun. You can understand they bottled at that point.
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`Q.
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`Looks like you're flying pretty close to the edge
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`08:22:28
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`10
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`there.
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`08:22:40
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`A.
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`Very close to the edge, yeah.
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`I was —— I thought it
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`was a great shot, but I was glad I saw it after.
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`I think
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`if I'd been on board,
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`I would have —— whew.
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`Anyway, so that's conventional, and then
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`we switched the steering on.
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`So it's the same vessel.
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`And then the second —— the picture on the right—hand side
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`is the steered streamers. And those two pictures were
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`taken 20 minutes apart.
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`Q.
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`So that's real data. That's not just somebody's
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`cartoon of what this looks like?
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`A”
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`Oh, no, no. That's real screen data. That's a
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`screen dump from the on board vessel.
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`M. LOCASCIO: Thanks, Dave.
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`24
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`BY MR . LOCASCIO:
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`08:23:06
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`25
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`Q.
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`Sir, what's WesternGeco's policy on licensing its
`
`Johnny C. Sanchez, RMR, CRR ~ jcscourtreporter@aol.com
`
`WESTERNGECO Exhibit 2155, pg. 6
`PGS V. WESTERNGECO
`IPRZO14-01475
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`WESTERNGECO Exhibit 2155, pg. 6
`PGS v. WESTERNGECO
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`Direct—Walker/By Mr. LoCascio
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`1671
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`Q.
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`Why?
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`A. Well, there's two reasons: One,
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`I talked about
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`someone having —— putting a bid in a country where the
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`government may have a say, so you may say we would put in
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`something —— and probably our competitors would as well --
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`not just specific to ours —— put in something that just
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`meets that technical requirement, even though you don't
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`know that's a real technical requirement, and then we'd
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`put in an alternative that meets the technical
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`requirement.
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`The only thing is we want to demonstrate the
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`value of our technology.
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`Q. What do you mean?
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`A. Well, we can -- we can show customers, well, if you
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`did it without,
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`then you can work through in cost. We may
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`work up a costing on exactly what a project would cost
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`without, and demonstrate the saving costing with, and then
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`they can make up their mind. And it's there in black and
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`white because it's our opportunity.
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`It's our shop window
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`to —- the technical people are convinced, but we need to
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`deal with procurement departments as well.
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`Q.
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`Let's look at another tender, sir, PTX 543. Dave,
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`can we pull that up some. Thank you.
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`If we can just
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`blowup from this piece right here.
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`Can you explain to the jury what we're
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`looking at here in Plaintiff's 543?
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`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.com
`
`WESTERNGECO Exhibit 2155, pg. 7
`PGS V. WESTERNGECO
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`WESTERNGECO Exhibit 2155, pg. 7
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`Direct—Walker/By Mr. LoCascio
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`1672
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`A.
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`So this is Apache PA Australia.
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`So this is when you
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`look at it, this is three surveys.
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`It says "WA26lP334P"
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`and "246" and "247?" combined.
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`So the northwest shelf of Australia is a
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`very perspective area.
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`It's a very interesting area.
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`It's partly —— there's quite lot of production from it and
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`it's open, and Apache is particularly active.
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`It's got a
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`lot of blocks out there.
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`Q.
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`A.
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`Q.
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`A.
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`Okay. Did you bid on this job?
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`We did bid on this job.
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`And did you get this job?
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`No, we didn't, unfortunately. Which was particularly
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`a shame on this one because this three was just the start
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`of a whole sequence of projects.
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`Q.
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`A.
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`Q.
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`Do you know who got this job?
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`Fugro did with ION DigiFIN.
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`And how do you know that Apache wanted lateral
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`steering on this job?
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`A.
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`So if you go down a bit on this —— so first of all,
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`it's Apache, and it's February 2010.
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`So I know Dave
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`Marcus, who is a very dominant character, chief physicist
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`for Apache will be saying I want streamer steering on all
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`this project because he decided at the end of 2008.
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`So if
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`I had nothing else, again,
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`that would be a big clue.
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`Q.
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`Does the letter we're looking at here, tell you
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`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.com
`
`WESTERNGECO Exhibit 2155, pg. 8
`PGS V. WESTERNGECO
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`WESTERNGECO Exhibit 2155, pg. 8
`PGS v. WESTERNGECO
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`Direct—Walker/By Mr. LoCascio
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`1673
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`something as well?
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`A.
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`Yeah.
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`If you go to the middle,
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`the big paragraph
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`there's a bit that's underlined.
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`Q.
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`Did you underline that or did it come that way from
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`Apache?
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`A.
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`No, it came that way from Apache. They want to be
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`absolutely clear on their requirements.
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`Q.
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`A.
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`And what does it say?
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`So if you look at the —— don't read it all, but that
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`first line preferred acquisition, it says 10 times 75
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`times, 5000 meters.
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`Q.
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`A.
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`Is that right here in that first sentence?
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`Yeah. And underneath it just two lines down it says,
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`10 times 75 times 6,600 meters.
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`Q.
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`Now,
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`that way of describing a streamer array with 3
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`numbers, 10 times 75 times 5000 meters. What does that
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`say?
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`A.
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`So that says I want 10 streamers, I'd like 10
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`streamers.
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`I want them 75 meters apart, and they will be
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`for these —— remember this is three projects. One project
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`wanted 5,000 meters, and the other two projects I think
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`wanted 6,600 meters long.
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`So I've got a very long spread
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`with streamers quite close together for that part of the
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`CD~JCHCH
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`Okay. And what does that indicate to you about the
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`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.com
`
`WESTERNGECO Exhibit 2155, pg. 9
`PGSVWNESTERNGECO
`|PR2014~01475
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`WESTERNGECO Exhibit 2155, pg. 9
`PGS v. WESTERNGECO
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`Direct—Walker/By Mr. LoCascio
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`1674
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`customer's requirements for this job?
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`A. He's obviously —— the needs have that streamer
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`separation, so even if it wasn't Apache, we'd be looking
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`and saying we'd want to do streamer steering on this
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`project.
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`Q.
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`Because for a 6,600—meter streamer --
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`A.
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`75 meters apart, that's a very dense spread without
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`lateral steering.
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`Q.
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`Did they tell you anything else, or did you have to
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`just go on that basis?
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`A.
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`No.
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`If you turn to the next page and you can see
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`there's a bit in bold, right in the middle. And they
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`said —— you can read that, "Proposals offering streamer
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`lengths greater than 6,500 and 5,000 meters, and number of
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`streamers fully steerable of 4 or more will be
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`1 C
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`considered."
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`Q. What does that mean?
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`A.
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`So that means I must, I'm.not going to compromise on
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`streamer length, go ahead and 6,500 and greater than
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`5,000. Now, because the streamer length really controls
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`how deep you can get your seismic image from, so that's --
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`streamer length is really important and number of
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`streamers fully steerable, so they must be fully
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`steerable. At the time some people were saying I'll just
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`steer the tail.
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`So fully steerable. And what's
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`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.com
`
`WESTERNGECO EXhibit2155, pg. 10
`PGS V. WESTERNGECO
`IPR2014-01475
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`WESTERNGECO Exhibit 2155, pg. 10
`PGS v. WESTERNGECO
`IPR2014-01475
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`Direct~Walker/By Mr. LoCascio
`
`1 67 5
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`interesting here is it says four or more.
`
`Q.
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`A.
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`I thought he wanted lO?
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`He wanted 10, but what he's signaling here is he will
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`compromise on the number of streamers. That's a soft
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`technology requirement that they must be fully steerable
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`and they must be that length.
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`Q.
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`If we can turn to the next header, 822 in your
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`binder.
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`If we can pull that up.
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`A.
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`By the way, he also puts it explicitly underlined
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`in —— in case we didn't get the point, it's on Page 008,
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`it says, "A.method for steering the streamers will be
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`considered as a prerequisite."
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`Q.
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`A_
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`Okay. Dave, can you pull that up?
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`A little bit belt and suspenders maybe, but I think,
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`you know --
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`MR. LOCASCIO:
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`543 .
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`THE WITNESS: You couldn't fail to get the
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`message on that one.
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`BY MR. LOCASCIO:
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`2O
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`Q. Where did you see that it was a prerequisite in this?
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`A”
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`Q.
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`A.
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`Q.
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`If you look at Page 008 --
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`Okay.
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`If you look Section 1, which has been underlined.
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`Okay. This is the first sentence where it said,
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`"A
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`method for steering of the streamers will be considered a
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`09:
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`l0
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`:07
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`09:
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`10
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`:26
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`ll:
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`08
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`Johnny C. Sanchez, RMR, CRR — jcscourtreporter@aol.com
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`WESTERNGECO Exhibit 2155, pg. 11
`PGS V. WESTERNGECO
`|PR2014-01475
`
`WESTERNGECO Exhibit 2155, pg. 11
`PGS v. WESTERNGECO
`IPR2014-01475
`
`
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`Direct~Walker/By Mr. LoCascio
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`167 6
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`prerequisite"?
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`A.
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`Yeah.
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`Q.
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`That's pretty clear indication that you have to have
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`it on this job?
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`A.
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`Yeah.
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`If we missed the subtle and the unsubtle,
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`that's the kick where it hurts,
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`just in case we were
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`asleep on -— and the person doing the bid was asleep.
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`Q.
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`Dave, if we can go to 822 again, please.
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`Mr. Walker, if you turn to the binder to PTX
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`822. Can you tell us what tender this is?
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`A.
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`Yes.
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`So this is a Tullow for Cote d'Ivoire, which is
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`Ivory Coast.
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`Q. Where is that?
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`A.
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`That's in the Gulf of Guinea. We're doing a lot of
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`Guinea. This is the gulf of Guinea in West Africa.
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`So
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`it's two or three countries to the west of Nigeria for
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`that job.
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`Q.
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`A.
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`Q.
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`And did you bid on this job?
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`We did bid on this job.
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`And did you get this job?
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`A.
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`No. We lost this.
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`Q.
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`To who?
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`A.
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`Q.
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`To Fugro with ION DigiFIN.
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`Does this tender tell you anything that indicates you
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`need to use lateral steering?
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`Johnny C. Sanchez, RMR, CRR ~ jcscourtreporter@aol.com
`
`WESTERNGECO EXhibit2155, pg. 12
`PGS V. WESTERNGECO
`IPRZO14-01475
`
`l 2 3 4 5 6 7
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`WESTERNGECO Exhibit 2155, pg. 12
`PGS v. WESTERNGECO
`IPR2014-01475