Good luck comes in threes for high performance Computing-as-a-Service provider Dug Technology (ASX: DUG), as it locks in a $3.6 million order from geoscience tech company Searcher Seismic. As per the Company, this represents Dug’s share in a multi-client data sale that Searcher made a few years ago. 

Searcher and Dug have a partnership history. In 2016, Searcher acquired a large seismic survey in the Campeche Bay area in the Gulf of Mexico, and it got Dug on board for 3D seismic processing and imaging on a 15,900 square kilometre area. Dug completed the work with the promise of a share in future profits from Searcher’s sale of the resulting data to third parties. First off, this receipt is such a share. Secondly, that’s some impressive foresight. 

Multi-client data sales target multiple clients interested in areas within or adjacent to the survey, and Dug got a piece of that profitability pie. 

Managing Director Dr Matthew Lamont commented, “This is a significant multiclient sale at a level not seen for several years. The sale is a great outcome for DUG and is also

further evidence of a strong market in oil and gas exploration.”

Previously named DownUnder GeoSolutions, Dug was founded in 2003 to help clients break down big data using complex algorithms. With four offices in Perth, London, Kuala Lumpur and Houston, the Company has a global client base using its product suite.

Dug does not include any info on the multi-client data works undertaken with its partners on its balance sheet because the value is challenging to determine. Plus, the costs of processing these data have already been incurred, so it’s like passive income and a great one at that. 

Dug’s had a profitable previous quarter as it reported a total revenue of $19.6 million in Q2 FY23, an increase of 25% on Q1 FY23 and 67% on Q2 FY22. Its EBITDA stood at $6.45 million, an increase of over $6 million on Q2 FY22. Its Services business represented the greatest chunk of the revenue share at 90%, with its other businesses, Software and High Performance computing, following at 6% and 22% respectively. In fact, the income from its new Services projects increased by ten times since Q2 FY22, being valued at $19.5 million. 

In Q2, the Company spent $840k to buy new computers and cater to clients outside of the oil and gas space. It has about $7 million available in funding right now, and the new deals across its product portfolio are making it possible to dabble in new waters.

Last month, Dug secured a $4.5 million five-year deal for the Dug Insights package with Brazilian oil and gas company Petrobas to deliver its interpretative software. Prior to that, on December 12, 2022, it signed a $400k two-year agreement with Monash University for computing and service solutions in its Dug McCloud business. 

Over 80% of companies feel that leveraging data can give them competitive advantage—managing it even more so. The big data market globally is set to be valued at about $908 billion by 2029, and sales deals like these are evidence that businesses are willing to spend big on big data.

Dug expects the Searcher sale to increase its net profit by $3.5 million, with the income recognised in Q3 FY23.