Wood Group PSN is a global provider of pre-operations, hook up & commissioning, operations & maintenance, engineering, construction, project management, training and decommissioning services to the energy industry. Employing over 26,000 people in more than 35 countries, Wood Group PSN offers high integrity, brownfield services that support customers to optimise performance, maintain production, reduce operating costs and provide integrity assurance. www.woodgroup-psn.com
Mitchell's Oil Field Services, founded in Sidney, Montana, in 1977, provides maintenance, installation and fabrication services to the North Dakota and Montana onshore oil & gas market. Mitchell's is owned by Stone Arch Capital, a Minneapolis-based private equity group, www.stonearchcapital.com, and management. www.mitchellsoilfield.com
Additional information in relation to the transaction
The total consideration is made up of an initial payment of $135m, plus three additional annual earn out payments of up to $47.5m in aggregate. The consideration will be satisfied from the Group's existing bank facilities. The gross assets at 31 December were $72m, and profit before tax for the year ended December 2011 was $13m. Annualised pro forma EBITA, adjusted for certain non-recurring items, for the year ended December 2011 was $19m.
The BakkenShale is one of the most active exploration and production oil formations in the US. Stretching over 200,000 square miles of the Williston Basin, the Bakken region, located in the states of North Dakota and Montana and the Canadian provinces of Manitoba and Saskatchewan, has been actively producing oil using conventional methods since the 1950s. Since the recent advent of unconventional drilling and production technology (e.g. horizontal drilling and hydraulic fracturing) the Bakken has experienced strong growth.
In 2008, the US Geological Survey estimated that there was between 3 - 4 bn barrels of recoverable oil in the Bakken. This figure was later revised in 2010 by the North Dakota Industrial Commission ('NDIC') to 6.2 bn barrels. Oil production in the US Bakken Shale has increased from about 98,000 bpd in 2005 to 310,000 bpd in 2010 and an average of more than 630,000 bpd in May 2012. Daily production growth is anticipated to continue.