GE Invests $175 Million in Oilfield Services
Expanding its investments in oilfield services, GE Energy Financial Services announced Friday that, through its affiliates, it has provided a total of US$175 million to three Canadian companies: High Arctic Energy Services Trust, Western Lakota Energy Services, and Production Enhancement Group.
The transactions with High Arctic Energy Services Trust and Western Lakota Energy Services were structured by GE Energy Financial Services and syndicated by GE Capital Markets, Inc. The members of the syndicate group include major Canadian financial institutions.
High Arctic Energy Services Trust, headquartered in Red Deer, Alberta--through its High Arctic Energy Services Limited Partnership--will use the US$105 million for working capital and future capital growth opportunities. Included in this capital expenditure plan are ten 250K Underbalanced drilling rigs to be completed and delivered by December 2006.
“Our 250K Underbalanced rig has rapidly developed into a technology leader in the underbalanced drilling industry,” said Jed Wood, High Arctic’s president and CEO. “The Trust will continue to leverage the benefits of its advanced technology to deliver efficient solutions to our customers.”
Western Lakota Energy Services Inc. based in Calgary, Alberta, will use US$43 million of credit facilities for the company's rig construction program.
Western Lakota recently completed construction of its second Texas rig, part of a contract signed with a U.S. oil and gas customer for work in the Permian Basin. The 3,600-meter ultra-heavy duty telescoping double drilling rig will move to the field within two weeks.
Production Enhancement Group, Inc. based in Calgary, will use the US$25 million credit facility to "seize opportunities that fit with our business plan," said Phillip Crawford, CEO of Production Enhancement Group. ,P> "With new drilling rigs being developed and old rigs being rebuilt, manufacturers are anticipating 25 percent growth from 2005 to 2006," said Kenny Jordan, president of the Association of Energy Service Companies, an international association of companies and individuals providing essential services and products to the oil and gas industry. GE Energy Financial Services is helping these companies fund their growth with a full range of commercial financial products.
"The oilfield services industry is a key growth target for GE," said Louis Natale, a senior vice president in GE Energy Financial Services' debt finance group, who has worked on several oilfield services transactions. "We have a solid team in place that understands the complexities of this segment and is drawing from our energy expertise to deliver more value to our oilfield services customers."
"Canada's oil and gas industry is experiencing an exciting transformation, we are working with our customers to achieve their business objectives, and this investment demonstrates our commitment to growth in Alberta," noted Mark Tonner, GE Energy Financial Services' team leader, origination in Canada.
GE Energy Financial Services, based in Stamford, Conn., invested $3 billion during 2005 in the world's most capital-intensive industry--energy. With $13 billion in assets, GE Energy Financial Services' 300 professionals offer structured equity, leveraged leasing, partnerships, project finance, and broad-based commercial finance to the global energy industry from wellhead to wall socket.
High Arctic Energy Services Trust, through its subsidiaries, is a global provider of underbalanced oilfield equipment and services, including drilling, completion, and workover operations. High Arctic's new underbalanced drilling technology and equipment is recognized for its ability to improve oil and gas production capabilities and is expected to develop greater acceptance in international markets. Based in Red Deer, High Arctic has domestic operations in Alberta, British Columbia, and the Northwest Territories. International operations are currently active in the Middle East and the former Soviet Republics.
One of Canada's fastest-growing energy services providers, Western Lakota Energy Services is currently operating 41 drilling rigs--including nine CBM/oil sands coring/pre-set rigs. It has committed to build an additional 18 rigs as part of its 2006 Construction Plan, which remains on schedule to be completed on or about the end of 2006. The company also operates five coil tubing service units with an additional three scheduled to be completed throughout 2006. Western Lakota continues to provide one of the newest fleets of safe and efficient drilling rigs and coil tubing service units in Canada while delivering strong results for shareholders, customers and Aboriginal partners.
PEG, a Houston-based energy services company incorporated in Alberta, owns patented WISE® multifunction coiled tubing-based well intervention technologies. As a holding company, PEG provides corporate support, financing, administrative assistance, management systems, and marketing services for its operating subsidiaries; PET International, Inc., Production Enhancement Technology, LLC, and A to Z Pressure Pump Services, LLC.
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