Artificial lift seems to be all the rage in the oil and gas industry these days. Two companies announced this week they were buying artificial lift-related businesses: Halliburton confirmed reports it was acquiring Summit ESP from billionaire George Kaiser’s Argonaut Private Equity and Forum Energy Technologies said it was picking up Multilift from oilfield services-centric private equity firm Pelican Energy Partners. Neither buyer revealed the purchase price.
What’s so hot about this segment of the oilfield services industry?
Electric submersible pumps, or ESP’s, which bring more oil to the surface by boosting the pressure in a reservoir, are increasingly being used in unconventional wells to maximize their economics, often times earlier in their life cycle, Tudor, Pickering, Holt & Co. said in a note.
Halliburton has been clear in its desire to expand in the $8.3 billion artificial lift business. And Summit — although small, with $180 million in sales last year versus Halliburton’s $15.9 billion — will help address what has been the biggest hole in its portfolio for years versus such rivals as Schlumberger, GE’s Baker Hughes (which Halliburton failed to buy) and Weatherford, analysts at Seaport Global Securities wrote in a note.