Technology start-up set to revolutionise oil industry's exploration efficiency

UK technology start-up MTEM is developing revolutionary new technology that could potentially save the oil industry billions of dollars per year that are currently wasted on drilling dry wells.

One of the largest-ever spin-outs from a UK university, MTEM was founded by a team from the University of Edinburgh's School of GeoSciences. The company has raised £7.4 million initial capital from UK technology VC firm Scottish Equity Partners and Norwegian energy investment funds Energy Ventures and HitecVision to commercialise its leading edge survey technology.

MTEM (multi transient electromagnetic technology) is based on a step-change geophysical method that can determine whether deep underground reservoirs contain hydrocarbons before drilling and may also be used to find hidden oil in mature producing fields. In the UK sector of the North Sea alone, it is estimated that more than a billion barrels of additional oil could be located and produced using this technology.

The technical strength of the founding team of Anton Ziolkowski, Bruce Hobbs and David Wright is complemented by the business and commercial background of Leon Walker, who joins MTEM as the company's new CEO and who held a variety of senior management positions in Schlumberger worldwide.

"The economic impact of this technology has the potential to extend far beyond simply the value of the oil produced," said Leon Walker. "By identifying new pockets of oil and gas, MTEM could extend the life of many oilfields, increasing recovery rates also from the known reservoirs."

David Sneddon, Director of Scottish Equity Partners' Energy Related Technologies team, said: "The potential market for this technology is around £500 million per year. The MTEM team has an outstanding technology track record and, with its differentiated second-generation technology in this emerging marketplace, the company is well placed to establish itself as a key industry player."

Einar Gamman, Investment Manager of Energy Ventures in Stavanger Norway, said: "For us it has been important that the MTEM method represents a new and game-changing standard in the rapidly emerging market for EM - hydrocarbon mapping both onshore and offshore."

Finn Ivar Marum, Investment Manager at HitecVision, added: "This new technology forms an attractive foundation for building a successful business. We look forward to working with the management team to realize the full commercial potential of MTEM."

MTEM was advised by DLA and by leading energy investment bank Simmons & Company International Limited.

About MTEM technology
Oil companies use seismic reflection surveys to determine subsurface structure and locate potential reservoirs of oil and gas. However, because these surveys are generally poor at determining the nature of the fluids in the rock pores, expensive drilling is needed to determine whether (or usually not) the reservoirs contain hydrocarbons.

The pore fluid may be brine, which is electrically conductive, or hydrocarbons which are electrically resistive. MTEM technology measures the flow of controlled pulses of electric current put into the ground to determine the resistivity of the rocks and so the nature of the fluids in them.

About Scottish Equity Partners
Scottish Equity Partners (SEP) is one of the largest independent private equity groups in the UK, and is currently investing from a venture capital fund in excess of £100 million, which is backed by leading UK and European institutional investors.

Typically, we invest between £500,000 and £5 million in early stage and growing companies, principally in the information technology, healthcare & life sciences and energy related technology sectors.

With offices in Glasgow and London, SEP is one of the most active venture capital investors in the UK and has a strong investment track record. We also have an excellent track record of identifying companies with high potential at an early stage and working with them to realise that potential as they face the challenges of building a successful business.

Recent high profile successes include Edinburgh-based Wolfson Microelectronics, which achieved a valuation of £250 million when it floated last October and bluetooth specialist CSR, which floated on the 1st of March with a market capitalisation at launch of approximately £240 million.

Current SEP investments in the oilfield sector include ARKeX, also pioneering oil and gas exploration technology and AMGas, a manufacturer of innovative gas detectors. Previous investments include Core Technical Services, Petroleum Engineering Services, British Bits and RST Projects.

For further information, see our website - www.sep.co.uk

About Energy Ventures
Energy Venture is an independent classic sector venture fund based in Stavanger, Norway. The fund specialises its investment activities in high growth technology companies within the energy sector.

Energy Ventures' main focus is on upstream E&P technologies, but consideration is also given to mid- or downstream technologies as well as to power and environmental technologies for the energy business. Target companies are located in the North Sea region, but will preferably have international operations. New technologies and smart applications of these are key drivers for investment, improved performance, productivity gains, cost reductions and the opening of new territory for E&P activities. The fund invests in high growth North Sea based technology companies that successfully markets and sells proprietary or unique technology products or solutions to the international market. More information can be found on: http://www.energyventures.no/

About HitecVision
HitecVision is one of the largest private equity investors in Norway and the largest in Europe to focus exclusively on the global oil and gas industry. HitecVision is currently investing the USD 100 million "Energivekst" fund, where investors include major Norwegian industrial and institutional groups, including Argentum Fondsinvesteringer, Norsk Hydro, Nordea, DnB Nor and others. All members of HitecVision's management team have long experience from the oil and gas industry.

HitecVision's current portfolio consists of 13 companies in Europe and the US, including Revus Energy, an independent oil company; Advanced Production and Loading, a leading turret mooring technology provider; Scandpower Petroleum Technology, the world's leading provider of multiphase flow simulation software; and Grenland Group, an engineering and construction contractor to the energy and process industries.

The HitecVision team has over the past ten years invested in more than 40 companies, taken four companies public in successful listings, and exited almost 20 investments in trade sales.

For further information, see www.hitecvision.com .

For further information contact:

For Scottish Equity Partners
Lara Bayley
Head of Marketing
Tel: +44 (0)141 273 4000
Email: lara.bayley@sep.co.uk

For MTEM
Leon Walker
Chief Executive
Tel: + 44 (0)131 472 4755
Email: Leon.Walker@MTEM.com

For Energy Ventures
Ole Melberg
Managing Partner
Tel: +47 51 84 12 96
Email: ole.melberg@energyventures.no

For HitecVision
Finn Ivar Marum
Investment Manager
Tel: +47 98 20 63 39
E-mail: finn.ivar.marum@hitecvision.com

For University of Edinburgh
Ronald Kerr
Press Office
Tel: +44 (0)131 650 9547
Email: Ronald.Kerr@ed.ac.uk