Archer increases 2023 guidance as it closes purchase of P&A specialist
Oilfield services provider Archer has closed the acquisition of plug and abandonment (P&A) specialist Romar-Abrado, increasing its guidance for this year.
The acquisition is based on an enterprise value of $8 million, plus earn-out pending trading performance over 2023 to 2025, and is conducted on a debt-free basis and financed by available cash at hand.
“We are pleased to announce the investment in Romar-Abrado, continuing our growth within our well services segment. The acquisition is another value-creating investment which expands our capabilities within workover operations and well abandonment,” said Dag Skindlo, CEO of Archer.
“Romar-Abrado fits well with our strategy for brownfield and P&A. We expect activity to increase within these markets going forward as fundamentals and outlook remain strong. In addition, the transaction will contribute to the acceleration of our international expansion within the well services segment.”
Romar-Abrado provides advanced milling and SWARF handling services to the global P&A market. The company employs 50 people with a reported revenue of approximately $10 million in 2021.
According to Archer, the purchase is accretive to its key financial ratios. Based on the acquisition and current trading, the company increases its guidance for 2023 EBITDA to 20-25 per cent above 2022 levels.
“The Romar-Abrado organization will further strengthen our team and product portfolio. Oiltools has over the last few years developed a heavy intervention service offering with broad applications within slot recovery and well P&A,” said Nicholas Pantin, VP at Archer Oiltools.
“Our services have been developed around steel retrieval and steel recovery as well as establishing barriers through plugs and annular remediation. Technologies around steel removal through milling and section milling will allow Archer to offer end-to-end solutions. The acquisition of Romar-Abrado gives us a significant leap forward and will contribute to future developments.”
From most recent company-related news it is worth mentioning that in September 2022 Archer secured a platform drilling contract with an estimated value of $50 million over the firm contract period.
The five-year contract includes the provision of platform drilling operations and maintenance services on seven installations with an unnamed operator in the UK.