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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
`
`
`WESTERNGECO LLC, . 4:09-CV-01827
` . HOUSTON, TEXAS
`PLAINTIFF, .
` .
` vs. .
` .
`ION GEOPHYSICAL .
`CORPORATION, FUGRO GEOTEAM, .
`INC., ET AL, . VOLUME 12
` . AFTERNOON SESSION
`DEFENDANTS . AUGUST 8, 2012
`. . . . . . . . . . . . . . . 7:42 A.M.
`
`
`TRANSCRIPT OF JURY TRIAL
`BEFORE THE HONORABLE KEITH P. ELLISON
`UNITED STATES DISTRICT JUDGE
`
` A
`
`
`
`
`
` P P E A R A N C E S:
`
`FOR THE PLAINTIFF:
`
`Lee K. Kaplan
`SMYSER KAPLAN & VESELKA LLP
`Bank of America Center
`700 Louisiana, Suite 2300
`Houston, Texas 77002
`Gregg F. LoCascio
`KIRKLAND & ELLIS LLP
`655 Fifteenth Street Northwest
`Washington, DC 20005
`Sarah Tsou
`Timothy K. Gilman
`KIRKLAND & ELLIS LLP
`Citigroup Center
`153 East 53rd Street
`New York, New York 10022
`
`
`
`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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` Torgerson Direct of Kenneth Williamson
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`time?
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`MR. PIERCE: We have a witness, Your Honor.
`THE COURT: Does anybody need a break?
`Yes, sir, make your way up here. We will clear
`away some of these bottles, and Ms. Loewe will administer the
`oath, please.
`(Witness sworn)
`MR. TORGERSON: May I proceed, Your Honor?
`THE COURT: Yes. Go ahead.
`MR. TORGERSON: ION Geophysical calls Kenneth
`Williamson, who is the senior vice president of GeoVentures
`Group, a business unit of ION. He has been with the company
`since 2006. From 1987 to 2006, he was employed by Western
`Geophysical, then WesternGeco and Schlumberger, in a number of
`capacities. As a sales manager, vice president of marketing
`and regional manager in the early 2000s, Mr. Williamson was
`familiar with the marketing and pricing of Q-Marine.
`KENNETH WILLIAMSON, DULY SWORN, TESTIFIED:
`DIRECT EXAMINATION
`
`BY MR. TORGERSON:
`Q
`Mr. Williamson, would you introduce to the jury and Court,
`please.
`A
`My name is Ken Williamson. As you have already heard, I
`have been in the business about 27 years. Been around the
`world, lived in various places, Cairo, U.S., London,
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`Azerbaijan, Moscow, and currently in Houston. And having
`recently been engaged, I guess I will be here to stay, for a
`few more years anyway.
`Q
`Mr. Williamson, could you give us a little background of
`your education, please?
`A
`I have a bachelor's degree in geophysics from the
`University College of Cardiff in Wales, in the UK.
`Q
`When did you graduate, sir?
`A
`1986.
`Q
`What did you do upon graduation?
`A
`I was -- I joined Western Geophysical in February 1987 in
`the Isleworth office in London.
`Q
`Let's fast-forward a little bit. What do you do with ION
`today?
`A
`I'm responsible for the -- I run a group called the
`GeoVentures business unit. We are an integrator. We do
`essentially multiclient projects, geological studies in basins
`around the world where we employ a vessel. We do our own data
`processing. And geological consultants, and we help -- we sell
`those geological information to oil companies who are looking
`to potentially explore in that country with that host
`government.
`Q
`Back to your tenure with Western Geophysical, what were you
`first hired to do?
`A
`I was a field geophysicist for riding on marine vessels and
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`for field marine geophysics.
`Q
`And how long did you stay in that capacity?
`A
`I was there for about two years on different vessels around
`the world.
`Q
`And then what did you do?
`A
`I was -- the group that placed me on those vessels was a
`group called Geophysical Support Group. So after two years of
`field experience, I ended up running that group and managing
`the deployment of geophysicists to the field to QC, quality
`control, startup operations on 3D vessels around the world.
`Q
`Where were you based at that time?
`A
`I was based in Isleworth in London.
`Q
`What did you do after that next aspect of work?
`A
`I was -- that job prepared me for a lot of technical
`support for operations and the bidding process. I got involved
`a lot more operationally and also from a market perspective in
`developing business and replying technically to some of the bid
`proposals that were out there. I eventually moved into
`operations role in about 2004. Yeah. 2004.
`Q
`All right. And at some point, did you come across a
`gentleman named Rick Workman?
`A
`Yes, I did.
`Q
`How did you come across him?
`A
`That was probably in the late '90s when I was based over in
`the U.S. He was in the applied technology group, so I knew him
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`through -- I was on the steering committee of technology
`projects and --
`THE COURT: Move the mic a little closer to you.
`THE WITNESS: Sorry. I knew him through his role in
`applied technology and my interaction with him in the late
`'90s.
`BY MR. TORGERSON:
`Q
`What about Mark Zajac? Do you know him?
`A
`Yes, I do.
`Q
`How long do you go back with Mr. Zajac?
`A
`I have probably known Mark since the mid-'90s.
`Q
`At some point WesternGeco and Geo-Prakla merged. Do you
`recall that event?
`A
`Very well.
`Q
`What kind of time frame are we talking then?
`A
`I think it was announced at the EAGE conference held in
`Glasgow in April or May of 2000, and it closed in
`December 2000.
`Q
`Now, at the time that you were at Western Geophysical
`before the merger, was there an opportunity for you to move
`over to Geco-Prakla?
`A
`Yes, there was. Ironically, when I was based in the U.S.,
`I was looking after North and South America in the marine
`business for WesternGeco, based in Houston around 1988, 1989.
`I was approached by a headhunter for a position,
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`which was ultimately disclosed to me as a marketing position
`inside Geco-Prakla at the time.
`Q
`What did you decide to do at that stage?
`A
`Well, during the process of the interview, the announcement
`about -- the joint venture actually happened during the
`interview process. So this process lasted maybe about three or
`four weeks, and clearly it was around some new technology and
`this ultimately Q-Technology that was being developed. So it
`was about a marketing position relating to that technology.
`And so ultimately the process of trying to get me
`on board kind of fizzled out on the basis that the two
`companies were trying to merge anyway, so I would ultimately
`end up there anyway.
`Q
`When the companies did merge, what did you find yourself
`doing for the new entity, Western Geophysical?
`A
`WesternGeco.
`Q
`Excuse me. WesternGeco.
`A
`At the time I was moved back to London and I became the
`sales and business development manager for Europe, Africa and
`the Middle East, based in London.
`Q
`Was that a single region that had been broken out by way of
`responsibility?
`A
`Yes, it was. Yeah.
`Q
`And how long did you stay in that sales management role for
`the EAME out of London?
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`Until April 2002, so almost two years.
`A
`And what did you do at that stage?
`Q
`I was moved to become the marketing manager for the whole
`A
`of WesternGeco, also based in Gatwick.
`Q
`Describe for the jury, if you would, the scope of your
`responsibilities in that marketing position.
`A
`The marketing role was for strategy, pricing, technology
`development, helping with developing new technologies,
`understanding which ones needed to be deployed for R&D budgets,
`across data processing, product lines, the land acquisition
`product lines, multiclient and also marine.
`But most of the -- it is fair to say that most --
`because of my previous position trying to deploy Q in the EAM
`region, a significant amount of that marketing role was spent
`around the marine Q-strategy and deployment and
`commercialization.
`Q
`I believe you stated that you started this marketing role
`in April 2002. Did you come across a gentleman named Robin
`Walker?
`A
`Yes, I did.
`Q
`Who is Robin Walker?
`A
`Robin Walker reported to me. As marketing manager for
`WesternGeco, Robin Walker reported to me.
`Q
`Did you have any interaction with Dr. Simon Bittleston?
`A
`Yes, I did.
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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` Torgerson Direct of Kenneth Williamson
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`And what was that interaction?
`Q
`Simon was responsible for project development across --
`A
`research and development across -- research and engineering in
`Schlumberger, across Schlumberger.
`So as marketing, I would have a product
`development manager also in WesternGeco, and the two of us
`would present this annual cycle of looking at technologies,
`looking at the market need for them, using that as part of the
`R&D budget planning process. So I met Simon Bittleston in that
`whole R&D planning cycle.
`Q
`We will come back to your involvement with Q, but at some
`point, you moved on from this vice president of marketing
`position. When did that happen?
`A
`That was in September 2004.
`Q
`And what did you do at that stage?
`A
`I was -- I looked after -- I was responsible for the
`Russian and Caspian business units. So I was initially based
`in Baku, Azerbaijan, and then moved to Moscow later on, as we
`moved some of this -- the Russian/Caspian geographical region
`for the whole of WesternGeco was my responsibility at that
`time.
`Q
`Was that an area that you were tasked with growing?
`A
`Yes.
`Q
`And at some point, you moved on from that position, as
`well. What did you do next?
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`In 2004, Schlumberger acquired a company called AGO. It
`A
`was an electromagnetic technology company, and they were
`starting to try to commercialize that technology. I was
`brought in from Moscow to help with that commercialization
`process, and I moved to Houston for that role in 2005.
`Q
`And at a high level, what is electromagnetic?
`A
`At a high level. It is essentially that reservoirs are
`charged with hydrocarbons. They are resistive, electrically
`resistive. The idea was to detect that level of resistivity
`from the surface as opposed to drilling holes through them and
`measuring resistivity in well logs.
`So the idea was to combine electromagnetic data
`with seismic so that the seismic data, we would see a
`structure. And then to the extent, from the surface we could
`detect if those structures were highly resistive and there was
`a likelihood of hydrocarbons challenging in those reservoirs.
`Q
`And then after finishing up, wrapping up the
`electromagnetic work at Schlumberger, what did you do?
`A
`I moved to ION Geophysical.
`Q
`In what time?
`A
`That was September 29, 2006.
`Q
`Mr. Williamson, let's go back to Q-Marine. When is the
`first time that you recall being exposed to Q-Marine?
`A
`General industry knowledge that there was a new technology
`generation coming out, that was hitting the streets around
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`Mayra Malone, CSR, RMR, CRR
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`1998, 1999. And I think the -- it was industry knowledge
`around that time that something was afoot. And formally I
`think the announcement was at the Calgary SEG, I seem to
`remember.
`Q
`What time frame do you recall that?
`A
`September, August or September in 2000.
`Q
`Do you recall attending presentations by Geco-Prakla
`shortly before the merger?
`A
`Yes. On the basis that I was in the company, was going to
`be part of WesternGeco, I was straight -- the first place to
`visit was Geco. Somebody had to understand a bit more of the
`technology.
`Q
`What was your understanding in the early days of what
`Q-Marine was intended to do?
`A
`A lot of the discussion was around being able to acquire
`data in rough seas. There was talk of working in the North Sea
`seas in the winter, single-sensor data being able to use to
`help reduce the weather noise. There was references to
`streamer steering on the basis, that it would reduce line
`change time, reduce the amount of in-fill. That was generally
`an efficiency type of argument or value proposition.
`Q
`After your joinder with the company, had that value
`proposition shifted?
`A
`By the time I was embedded in the company, yes, there was a
`different message.
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`WESTERNGECO Exhibit 2124, pg. 10
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`In what respect?
`Q
`I think -- I later came to learn of the internal evolution
`A
`of the message. When I became part of the marketing role, I
`started to get the history of how this came about. But by the
`time I was actually an employee inside the WesternGeco joint
`venture, it was more about how we -- rather than just doing
`things cheaper, we need to have a better solution, something
`that is more accurate, of more value to the end customer. So
`it was of a value-type of message rather than a pure efficiency
`angle.
`Q
`Of the different aspects, technical aspects that were being
`offered by Q-Marine, was there one that you believed was being
`emphasized by the company at that time?
`A
`Well, if you -- just looking back to 1998 and '99, the
`system was always the system that WesternGeco were bringing
`out. It's the single sensor -- you know, thousands and
`thousands of channels system. It was a single sensor. It was
`going away from groups into a single sensor type of platform
`that was the key message behind that.
`Q
`And what was the point of the single sensor? What was the
`advantage for the customer at the end of the day?
`A
`Well, initially the idea was that it was to reduce -- the
`single sensors could sample the weather noise and the
`interference caused by bad weather and help build a noise --
`understanding the noise so it could be removed in data
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`WESTERNGECO Exhibit 2124, pg. 11
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` Torgerson Direct of Kenneth Williamson
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`processing.
`
`But on the value side, it was understood that
`that can help reduce noise in general, and it would provide a
`better signal-to-noise ratio in terms of the ability of getting
`into a reservoir. It would provide a higher quality signal.
`Q
`So there was a focus on data quality?
`A
`Yes.
`Q
`And, Mr. Williamson, inside WesternGeco and specifically in
`your role as a sales manager from 2000 to 2002 and your role as
`marketing from 2002 to 2003, was there an internal ranking, if
`I can use that term, about the importance of the different
`aspects of Q-Marine?
`A
`In some ways, there was. This came around -- this came
`about as a result of trying to change some of the pricing
`expectations. But we tried to understand, well, if we are
`going to enable certain features and turn them on, which one is
`going to attract more value. So there was a process around
`that to understand which component added, which component
`contributed how much in terms of the value of the overall --
`the final product.
`Q
`Now, explain to us, if you would, the original pricing
`strategy that was in place when you arrived.
`A
`When I arrived, it was a bit of a shock. We were in the
`middle of one of the worst times in the industry, and prices
`were at rock bottom. When I arrived in WesternGeco, there was
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`WESTERNGECO Exhibit 2124, pg. 12
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`a "by the way, here is this technology we have got, and it is
`going to cost -- the idea is to get three times the price of
`conventional streamer data." That was the intention. That was
`the instruction in terms of how we were told to go and sell
`this technology.
`Q
`And did you learn how that three-times conventional price
`was arrived at?
`A
`There is some folklore behind this that was gathered up
`through my time in WesternGeco, is that we're roiling out a new
`technology in the midst of a very difficult financial time for
`the industry. It was going to be tough. And I think Olav
`Paulsen told me this himself. They were in front of -- Euan
`Baird was the chairman of Schlumberger at the time. And so
`Olav asked about how good is this stuff. And he said, "It is
`10 times better than everything else."
`And Euan's instructions were, "In that case, it
`needs to be sold for 10 times as much, and there is going to be
`a problem if it isn't sold for 10 times as much."
`And that was later -- I think what Euan was
`trying to say was it was about three times the price, not 10
`times the price. There was a perceived value, let's go and try
`and change the pricing game significantly, and let's throw
`out -- so it was like an arbitrary number that was -- let's see
`if we can get away with this type of pricing strategy in the
`marketplace.
`
`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`WESTERNGECO Exhibit 2124, pg. 13
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` Torgerson Direct of Kenneth Williamson
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`Did that pricing strategy impact how you personally were
`Q
`trying to sell and market that suite of products?
`A
`It did. There was some -- internally there was some --
`coming from the Western Geophysical side, I thought there were
`some problems trying to sell it at that rate. I know some of
`my sales people that reported to me were struggling with the
`concept of actually telling the customers that's how much it is
`going to cost. There was some internal discussions as to this
`isn't going to go down well when I tell them it's going to cost
`that. Talk about sticker shock. There is going to be some
`issues.
`
`So I think it is fair to say that I wasn't as
`indoctrinated in the Schlumberger way at the time, and coming
`from a Western Geophysical background, we were fairly
`entrepreneurial, we were fairly autonomous, we were able to
`come up with business deals or business arrangements which
`would try and soften the blow or try and find an early way in.
`So I had to implement some of those ideas to help gain some
`traction in the marketplace.
`Q
`And speaking of traction, while you were sales manager from
`2000 to 2002, what was your impression as to the acceptance in
`the market of Q-Marine's premium price?
`A
`From which date?
`Q
`From 2000 to 2002, when you were sales manager over the
`EAME, what was your impression of the acceptance in the market
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`WESTERNGECO Exhibit 2124, pg. 14
`PGS v. WESTERNGECO
`IPR2014-01478
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`

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` Torgerson Direct of Kenneth Williamson
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`of that premium price that had been established by the company?
`A
`It simply wasn't accepted at all. It wasn't -- there
`was -- so there were various ways to try and introduce it at
`lower rates, but we didn't get anywhere close to three times
`the price for conventional seismic.
`Q
`Now, moving forward in time, you eventually became the vice
`president of marketing, in April of 2002. How much of your
`time was spent on Q-Marine?
`A
`I would say probably three-quarters of my time was spent
`trying to either rethink the strategy or try different ways of
`promoting what we are doing and also trying different pricing
`techniques or different ways to deliver the technology
`commercially.
`Q
`What were some of the rethinking of the tactics or
`strategies that you employed under your leadership?
`A
`One of the ones was to come up with a tiered pricing
`structure, a bit like a car wash, on the basis that there is
`sort of a basic level. The idea is you can have a Q-Marine
`vessel with everything turned off, but data could be recorded,
`that ultimately the higher quality products could be extracted
`later. That would give them a way at least to have the vessel
`deployed on the project and maybe, possibly buy some of the
`quality products later on.
`Q
`When you first took over this role, did you have an
`initiative or make some effort to attempt to take the pulse of
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`WESTERNGECO Exhibit 2124, pg. 15
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

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` 4026
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` Torgerson Direct of Kenneth Williamson
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`the market?
`A
`Yes.
`Q
`Tell us about that.
`A
`We had the people who were interfacing with customers on a
`day-to-day basis to try in a very informal way, just try and
`get some email feedback on, you know, what do you think of Q,
`Q-Marine, the pricing? Based on what you know, how much would
`be willing to pay. It was sort of like a market pulse thing,
`but it was all done where people had a relationship with a
`customer.
`
`And we got several emails back and feedback and
`comments, and that was kind of a -- it was something that I
`initiated on the basis that I was trying to demonstrate that we
`need to do something different, other than our current
`philosophy, because we had very poor traction in utilization.
`Q
`Now, Mr. Williamson, let's go specifically to this time
`frame we're talking, 2002 or thereabouts. I want to get an
`understanding of how bad the market really was. Have you heard
`of something called a "reverse auction"?
`A
`Yes, I have.
`Q
`What is a reverse auction?
`A
`A reverse auction is almost one where there are no winners.
`It is where a company would put on a seismic program, like a
`work program, and companies would be invited to submit a
`technical proposal first. And then, if they were allowed to
`
`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`WESTERNGECO Exhibit 2124, pg. 16
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

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` 4027
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` Torgerson Direct of Kenneth Williamson
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`qualify, they would go on to this website. And a period of
`time would open up where they can actually bid on -- it is like
`eBay except the price would go down and the price could not go
`back up.
`
`So the idea is you would submit your price for
`doing the work, and you would know from the website that you
`were not in first place. You were in, say, in second, third or
`fourth place. You probably wouldn't know who the person in the
`winning place would be, but you would have an opportunity to
`lower your price. And the idea was that ultimately you would
`have a walk line, and then you'd get companies down to their
`walk-away price.
`Q
`Sort of a race to the bottom as it related to price?
`A
`Yes. Yes.
`Q
`Shifting gears just a little bit, as an aside,
`Mr. Williamson, you talked about if certain companies who were
`bidding were allowed to move on. Is that in reference to
`certain technical requirements that might have been in place by
`this oil company?
`A
`Yes. There was normally a technical requirement that was
`initially requested, and then the technical proposal would be
`submitted against those requirements. So on the basis of you
`were technically qualified, you were allowed to participate in
`the reverse auction process.
`Q
`Now, over time, Mr. Williamson, in your experience at
`
`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`WESTERNGECO Exhibit 2124, pg. 17
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

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` 4028
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` Torgerson Direct of Kenneth Williamson
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`WesternGeco, were there instances where companies would
`eventually secure a bid without actually meeting all of the
`technical requirements?
`A
`Yes.
`Q
`And likewise, would there be instances where WesternGeco
`itself would submit bids that might not meet all technical
`requirements?
`A
`I think there were often times where WesternGeco would
`submit several bids on the basis -- there would be sometimes a
`non-Q proposal. So here's a proposal with the Q-Marine
`technology, and here's a convention proposal without Q-Marine
`technology.
`Q
`Now, you had sort of described this different culture
`between yourself and perhaps others from Western Geophysical
`versus those from Geco-Prakla, particularly on this pricing.
`Could you tell the jury the trade-off or the
`tension that you were addressing between rates and utilization
`of vessels?
`A
`In a heavy asset business like marine seismic, utilization
`is a fairly important driver of profitability. We were sitting
`there with -- at one point I think we had four Q-Marine vessels
`that were equipped, and all four of them were tied up at the
`dock because we were not able to get the kind of pricing
`expectations we were driving.
`So ultimately there are two places you don't want
`
`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`WESTERNGECO Exhibit 2124, pg. 18
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

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` 4029
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` Torgerson Direct of Kenneth Williamson
`
`to be in any utilization game, and that is to have a very, very
`high price and zero utilization or to have a very, very low
`price and 100 percent utilization.
`At the time we were -- I think we were sitting at
`8 or 9 or 10 percent utilization, but still not really getting
`our price. Our prices were still below our three times -- our
`three times increment over conventional.
`So at some point, there is a position where there
`is probably a smaller price increase for the technology but a
`much higher utilization, which would generally make a Q-Marine
`vessel more profitable than a conventional one.
`Q
`Did you bring a new strategy to the organization, then, as
`to try to create demand by lowering the price and getting the
`product acceptance out there?
`A
`Yes. I mean, my -- when I was exposed to this problem that
`we had in getting Q-Marine vessels utilized, it was a case of
`making -- it was a -- here is something you really need to
`have, but it is a really high price. So my philosophy behind
`this, which I communicated to the president at the time, was
`that my belief is, if the technology is as good as we say it
`is, we should get it into the marketplace, and the oil
`companies using it will realize the value. That will create
`more demand, and then you can control the price by controlling
`the rate at which you release or make Q-Marine capacity
`available into the marketplace.
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`WESTERNGECO Exhibit 2124, pg. 19
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

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` 4030
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` Torgerson Direct of Kenneth Williamson
`
`So that was the philosophy which I tried to get
`
`moving.
`Q
`And you had previously described as part of the
`implementation sort of a tiering of different prices?
`A
`Yes.
`Q
`And explain to the jury, if you would, at this time frame,
`what was the price of a conventional 3D vessel and crew?
`A
`At the time it was probably around about 2.3 -- a
`conventional crew could get about $2.3 million for one month's
`worth of work. That was about the rate at the time.
`Q
`And what was the premium tiering that you put in place with
`regard to Q-Marine?
`A
`We started at, I think -- what we called Tier 1, with
`everything turned off, I think we started at around -- we tried
`to get $4 million. And then we had different tiers which were
`based on the resolution of the receivers.
`Q
`So if you had three tiers and the first tier was about
`$4 million a month, what was the second tier?
`A
`The second fear was about five and the third was six.
`Q
`And what were those based on?
`A
`They were based -- the primary driver was what we call the
`spacing between the groups on the streamer. So the lowest
`resolution was 12.5-meter group spacing, which is what the
`conventional streamers were delivering at that time.
`The next tier was 6.25, and then the highest tier
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`WESTERNGECO Exhibit 2124, pg. 20
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

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` 4031
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` Torgerson Direct of Kenneth Williamson
`
`was based on 3.125 meters, which is the highest resolution that
`we could deliver at the time.
`Q
`So in summary, the higher the price, the higher the
`resolution of the image?
`A
`Yes.
`Q
`And during your tenure, how many times did a company agree
`to the highest rate?
`A
`I don't believe -- we didn't have anyone take that rate.
`Q
`So even if a better quality image was available to these
`oil companies, were they not interested in paying more for it?
`A
`I think they -- the industry -- the industry has got lots
`of geophysical capability embedded in their organizations, and
`they are -- they go out and request services which will satisfy
`their technical problem.
`So to the extent that those -- if it is good
`enough and it costs this much, then I'm happy. If it is a lot
`better, do I need it to be better. It's a bit like do I need
`to buy a Ferrari to go and do my shopping at the supermarket.
`So I think there was a bit of that psychology inside the oil
`companies.
`Q
`So, Mr. Williamson, if someone were to suggest that oil
`companies would willingly paid more for a better quality image
`virtually under any circumstances, is that at odds with your
`personal real-world experience at WesternGeco?
`A
`I think there was a -- oil companies would not always go
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`Mayra Malone, CSR, RMR, CRR
`mayramalone@comcast.net
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`WESTERNGECO Exhibit 2124, pg. 21
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

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` Torgerson Direct of Kenneth Williamson
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`for the best image. They would go for the lowest price for the
`technology which would solve their problem.
`Q
`And that varied on a survey-to-survey basis?
`A
`Yes.
`Q
`Mr. Williamson, was there ever any intent externally with
`your customers to vary the pricing of Q-Marine based on lateral
`steering?
`A
`There was both internal and external discussions as to how
`lateral steering could be -- in terms of the car wash
`principal, do we turn it on or do we turn it off? Do we make
`it available at a certain price?
`So, yes, there were discussions around how and

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