Houston-based National Oilwell Varco Inc. (NOV) is expanding its completions capabilities by acquiring a unit of Trican Well Service Ltd. for C$53.5 million.
The Trican completions unit, which designs and sells downhole tools for multi-stage, multi-zone completions, operates in Canada, the United States, Russia, Kazakhstan and Norway. The Calgary-based oilfield services provider, in business for 20 years, in January agreed to sell most of its U.S. assets to Houston-based Keane Group for $247 million (see Shale Daily,Jan. 26).
“This transaction represents an exciting step for NOV in expanding the breadth of our completion and production-related product offerings,” NOV CEO Clay Williams said. “The transaction allows NOV to leverage our best-in-class manufacturing and global supply chain to expand sales into new markets and meet our customers’ demands for cost-effective, innovative and high quality completion tools.
“The technologies acquired, along with the talented team, which will continue to develop additional downhole completion solutions as part of the NOV family, make this transaction consistent with our strategy of investing in solutions which assist our customers in lowering their cost of supply.”
The transaction, for a mix of cash and NOV shares, would give NOV the Canadian-focused Trican Completion Solutions Ltd. and Trican Completion Solutions LLC, which is the U.S. arm. Also being sold is equity interest in the Norwegian-based Petro Tools Holding AS and Russian-based Trican Completion Solutions LLC. Assets also being sold related to the completion tools business that are held by Trican and affiliates.
NOV provides drilling support services worldwide through four business segments: rig systems, rig aftermarket, wellbore technology and completion/production systems. During a conference call in April, Williams had said the company’s long-term strategic plan was to invest “for the next upturn” and build “the next generation of tools” (see Shale Daily,April 28). The company has like its peers downsized significantly since oil prices plunged.
NOV agreed to pay C$30 million in cash and trade C$23.5 million in shares, with the number of common shares based on its U.S. share price on the New York Stock Exchange for the five trading days preceding the closing date, scheduled by June 30. All of the common stock received by Trican in connection with the transaction would be subject to a six-month holding period. Trican also agreed to provide some transitional services once the deal is completed.
“The transaction with NOV will strengthen Trican’s balance sheet and will allow Trican to focus on its core remaining businesses,” CEO Dale Dusterhoft said. “We believe NOV, with its leading global platform, will be able to provide continued technical leadership and customer support for the completion tools business.”
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