Aker Solutions Acquires Well Technology Business
Aker Solutions has signed an agreement to acquire the well intervention technology business from X3M (pronounced "Extreme") International.
The acquisition will grow Aker Solutions (AKSO.OL)' well intervention technology and service portfolio worldwide as well as increase the company's presence in the important Middle East market. X3M is an international niche provider of down-hole intervention service tools and technology products. Its core products are innovative down-hole tools like plugs, packers, hangers, valves and a complete range of setting and recovery tools. Well intervention services are operations carried out in an oil or gas well, with the objective of maximising production and increasing the recovery rate of oil and gas.
"Today we are buying plug products and hiring the plug-setting services from third parties. Through this acquisition we will expand our product portfolio and be able to offer our customers a more complete - and thereby more competitive - service offering," says Wolfgang Puennel, head of well intervention services in Aker Solutions. X3M has a solid portfolio of proprietary technologies. The plugs and packers for HPHT (high pressure-high temperature) and sour gas, have a potential to capture a significant market share in the coming years. The tools have been used successfully in gas wells with extremely high concentrations of H2S and CO2. X3M is also developing a new metal to metal seal technology that could prove to be a future industry game-changer in certain areas.
"We are acquiring an exciting product portfolio. However, we are planning to invest to rapidly expand and further improve on our technology position within this segment," says Puennel. X3M is well established in the Middle East, with operations in Oman Saudi Arabia and United Arab Emirates. Aker Solutions already has well service set-ups in Saudi-Arabia and Oman, which will merge its operations with X3M's. X3M also has a design engineering team based in Narvik, Norway. The research and development (R&D) set-up in Narvik will not only support X3M's activities but also strengthen Aker Solutions' existing R&D function within wireline tractors and application tools.
"Today Aker Solutions is a major provider of well intervention services in the British and Norwegian sectors of the North Sea. However, we have the potential to grow our business significantly by introducing X3M's plug products to our service portfolio in the North Sea. Equally, we will seek to capitalise on X3M's position in the Middle East to gain a stronger foothold there. All in all this acquisition offers a complementary technological and geographical footprint," says Puennel.
Aker Solutions is acquiring the well intervention technology business from X3M International, whose main owners are the Middle East-based Catalyst Private Equity Fund and X3M's original founders. Transaction value is approximately USD 8 million. X3M had operating revenues of USD 6 million in 2010. The transaction is expected to be completed early November 2011.