Superior has acquired a 40% interest in Coldren in order to give its core businesses the first right to provide services, rental tools and liftboats required by Coldren and to diversify the property portfolio of its subsidiary SPN Resources, LLC. Coldren's purchase of Noble Energy's shelf assets is expected to close by June 30, 2006 with an effective date of March 1, 2006, subject to regulatory review and customary closing adjustments and conditions.
Chairman and CEO Terry Hall Comments
"Our involvement in this investment is underpinned by our core competencies in enhancing, extending and maintaining oil and gas production," said Terry Hall, Chairman and CEO of Superior Energy Services. "Through our long-standing relationship with First Reserve and our experience working with the management of Coldren, we have demonstrated our expertise and ability to add value throughout a well's life-cycle. To Superior, this opportunity significantly increases our earnings potential across all of our business segments, allowing us to optimize utilization of services, rental tools and liftboats. We believe the multiple benefits to our core business enhance this opportunity."
Superior will have a first call on all well intervention and decommissioning contracts required for Coldren operated properties. Based on initial evaluation of the properties expected to be acquired, Superior believes at least $165 million in work can be provided by its well intervention services, rental tools and liftboats. This amount is expected to increase upon further engineering evaluation of the acquired properties.
The properties to be acquired by Coldren span the entire Gulf of Mexico shelf waters and consist of approximately 725,000 gross (423,000 net) leasehold acres over 54 total fields. These properties contain 520 wellbores (132 operated) and 158 platforms (27 operated), all of which are expected to have meaningful production-related and decommissioning needs.
"Coupled with our increasing library of work and the positive market outlook for well-intervention demand, this transaction provides us with the added comfort to opportunistically expand our core businesses without sacrificing utilization or margin potential," added Hall.
Financing and M&A advisory services for this transaction have been provided to Coldren by Credit Suisse and Bank of America, N.A.
Superior Energy Services, Inc. is a leading provider of specialized oilfield services and equipment focused on serving the drilling-related and production-related needs of oil and gas companies primarily in the Gulf of Mexico and select international markets. The Company uses its production- related assets to enhance, maintain and extend production and, at the end of an offshore property's economic life, plug and decommission wells. Superior also owns and operates mature oil and gas properties in the Gulf of Mexico.
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