3i Sells Stake in Reeves Oilfield to Precision Drilling

3i, Europe's leading venture capital company, has agreed to sell its investment in Reeves Oilfield Services Limited, to a wholly owned subsidiary of Precision Drilling Corporation, a Canadian and US listed oilfield services company, achieving a profit of approximately 33million from an original investment of 5m. The sale is conditional upon acceptance by 90% of Reeves' shareholders.

Loughborough based Reeves Oilfield Services develops innovative data logging tools which it uses to provide oil and gas well logging services to energy companies worldwide. Reeves tools measure pressure, temperature and radioactive activity - all parameters which are used by well engineers to determine the economic viability of a particular oil well. The company has operating companies in Canada, USA, Australia and Scotland and employs over 400 people.

3i originally backed the 9m MBO of Reeves from BPB plc in 1995. The business has invested heavily in developing new technology which has been very successful in its markets. As a result, the company has grown very quickly, with turnover increasing from less than 20m to over 40m today profits have grown by more than 6 times.

Precision is acquiring the whole of Reeves' shares for 92.4m. Precision is Canada's largest oilfield service company providing contract drilling and technology services to energy companies around the world. The company, headquartered in Calgary, Alberta, Canada has turnover approaching 1bn and research and development offices in the United States, Canada and the UK, supporting clients across Canada, US, Mexico, South America, Europe, Africa the Middle East and Asia Pacific. Over the last five years Precision has also emerged as a high technology service provider to companies drilling for energy, providing both integrated contracts and bespoke services to aid international development

Richard Bishop, Director of 3i Midlands; commented "Our investment in Reeves Oilfield Services has been a tremendous success. The management team and employees at the company have achieved a truly impressive performance over the last 9 years, by using their skill and expertise to develop a successful global company in a highly competitive market. It is satisfying to have seen Reeves grow into a company that is attractive to a high profile international buyer like Precision Drilling and we wish the company every success for the future."

Reeves Oilfield Services was advised by CIBC World Markets and Shoosmiths. 3i was advised by Eversheds, Nottingham. Precision was advised by Norton Rose.

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