AGR has agreed to purchase 100 per cent of Peak for £26 million in a deal that will significantly enhance AGR's position as one of the world's leading suppliers of exploration, development and production services to the international petroleum industry.
Sverre Skogen, AGR's Chief Executive Officer, said: "We are delighted to have reached this agreement with Peak. Its operations are very similar to those of our Drilling Production Technology (DPT) subsidiary in terms of the scope and quality of services, and we are confident we will see many benefits from this new alliance. One immediate benefit from the Peak acquisition is that it provides AGR Petroleum Services with a significantly improved international presence. At the same time we gain access to a strong brand name, unique products and services and world class performance. AGR and Peak represent a perfect match. The acquisition is an important step to achieve our growth ambitions for integrated operations around the world."
Peak will continue to operate under its own name from its Aberdeen headquarters. It is anticipated that some of the existing AGR services will be brought under The Peak Group brand. All of the Peak shareholders – Andrew Paterson, Chief Executive, Bob Lyons, Chief Operating Officer, and Gordon Angus, Chief Financial Officer - have agreed to remain in executive positions within the enlarged group. Peak employees are being reassured that there will be full staff retention and the current recruitment campaign will continue.
"We see this as a really positive move," said Andrew Paterson. "The Peak Group will be able to go forward on an even stronger corporate, financial and managerial platform. This must be good for our clients, who will see the benefits of our greater operating and financial muscle, and our staff who can look forward to even broader opportunities."
AGR, based in Straume, near Bergen, has in a comparatively short time grown to be a significant provider of services to the oil and gas industry both on the Norwegian Continental Shelf and internationally. At the turn of the year the company had 940 employees. The group's turnover in 2005 was 950 N Kr. AGR operates with four business areas: Petroleum Services, Drilling Services, Integrity Services and Project Services.
On May 23, 2006, AGR submitted an application for the listing of its shares on the Oslo Stock Exchange.
The Peak Group, established in 1997, has over 90 staff with revenues of £25 million in 2005. The company has three divisions: Peak Well Management, Peak Consultancy Services providing recruitment and consultancy services, and Peak Performance, an industry leader in the development and application of performance management systems for well construction.
Peak Well Management, which managed the drilling of 24 wells in 2005, has established an international reputation for its multi-well, multi-client operations. Andrew Paterson said this offering would be significantly enhanced by the link with AGR. The Norwegian company has recently contracted the semi-submersible Bredford Dolphin drilling rig for three years starting later this year. Peak, which has been using the Bredford Dolphin in its own multi-well, multi-client programs, sees this contract as evidence of increased opportunities to build long-term programs for oil company clients. "I believe that with the combination of our companies and our experience in each of the North Sea sectors, we will be able to further develop the market."
With respect to the transaction, CIBC World Markets acted as exclusive financial advisors to AGR and KPMG acted as exclusive financial advisors to Peak.
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