Schlumberger acquires Peak Well Systems
On January 5, 2017, Schlumberger (SLB) acquired Peak Well Systems, which operates advanced downhole tools. Downhole tools are used to control oil flow in energy production.
Peak Well’s downhole tools can extend well life, restore well integrity, and enhance well performance in combination with retrievable bridge plugs. The acquisition is expected to enable SLB to offer integrated well intervention solutions on electric lines, mechanical slicklines, and digital slicklines.
Who sold Peak Well Systems to Schlumberger?
Schlumberger acquired Peak Well Systems from equity investor Summit Partners and Peak Well Systems’ founders and management team. Schlumberger makes up 19.6% of the iShares US Oil Equipment & Services (IEZ).
How is SLB’s Production segment expected to perform in 4Q16?
Schlumberger will add Peak Well Systems to its Production segment. From 2Q16 to 3Q16, revenues for the Production segment fell 1.0%. As for its operating income, the segment rose 9.0% in 3Q16 compared to 2Q16. In 3Q16, the segment benefited from increased fracturing activity in North America.
From September 30, 2016, to January 6, 2017, the US rig count rose 27.0%. So the Production segment is expected to better its performance in 4Q16, although lower fracturing activity in Latin America and the North Sea could continue add pressure. You can find out more about Schlumberger in Market Realist’s series Schlumberger before 4Q16: A Pre-Earnings Analysis.
Revenue growth: SLB versus peers
Schlumberger’s revenue fell 2.0% in 3Q16 over 2Q16. For the same period, Halliburton’s (HAL) revenue remained nearly unchanged. Baker Hughes’s (BHI) revenues fell 2.0%, while National Oilwell Varco’s (NOV) revenues fell 5.0% for that period.
In the next part of this series, we’ll take a look at SLB stock for the past three months.