Aberdeen-based oil services company Wood Group has continued to expand its operations the other side of the Atlantic Ocean – with another multi-million pound deal.
The group is to spend over £100m acquiring US firm Mitchell’s Oil Field Services.
Mitchell’s, which is presently owned by a private equity group run out of Minneapolis, was valued at $77m (£44m) at the end of last year.
The firm presently provides unconventional gas and oil extraction services on the Bakken shale fields, which covers large parts of Montana and North Dakota.
The acquisition will be a two-step process. Initially, the deal will cost £83m, ($135m) with further payments totalling £29m ($47m) to be paid on a performance related basis over the next 36 months.
The deal follows Wood’s purchase of the Duval Group earlier this year and is in line with many Scottish companies’ policies to acquire rivals across the world.
Smaller companies too, recognising opportunities in the local market, are completing acquisitions – many through releasing capital with invoice discounting and other such strategies.
The latest deal for Wood Group will boost its operating profits significantly. It is estimated that the Bakken field has a capacity of over six billion recoverable barrels of oil. Already, the past two years have seen production double to 620,000 barrels per day.
Speaking about the deal, the president of Wood Group PSN division, the group’s American operations side, said:
“The addition of Mitchell’s significantly expands our service offering and increases our presence in the region.”
Derek Blackwood also indicated further expansions are planned.