Aberdeen's Wood Group to spend £100m on US firm Mitchell's
- 22 September 2012
- From the section Scotland business
Wood Group, the oil services giant based in Aberdeen, is spending more than £100m on a US firm specialising in unconventional oil and gas extraction.
The company is acquiring Mitchell's Oil Field Services for an initial payment of $135m (£83m).
Up to $47m (£29m) will then be paid, depending on performance over the next three years.
Mitchell's provides services in the Bakken shale oil and gas fields of North Dakota and Montana.
The firm is currently owned by a Minneapolis-based private equity group.
Derek Blackwood, president of American operations for Wood Group PSN division, said: "The addition of Mitchell's significantly expands our service offering and increases our presence in the region to approximately 650 personnel operating from nine locations.
"This acquisition is in line with our strategy to expand our presence in the US oil shales and follows our purchase earlier this year of Wood Group Duval, which services the Eagle Ford shale region in South Texas."
It is reckoned by the US Geological Survey that the Bakken field has 6.2bn barrels of recoverable oil, using unconventional methods of fracturing shale oil formations.
In the past two years to May 2012, production flows have doubled to 620,000 barrels per day.
By the end of 2011, Mitchell's was worth $77m (£44m), with profits during last year of $13m (£8m).