Precision extends global reach

Having seized the title of Canada’s largest oilfield services contractor, Calgary-based Precision Drilling is making some bold international moves. It acquired Reeves Oilfield Services of Britain for C$218 million on May 8 just six weeks after scooping up a U.S. rival GlobalSanteFe for US$316.5 million.

Under the Reeves deal shareholders owning 73.6 percent of the British company have agreed to tender their shares to the Precision offer.

“We are enthusiastic about the Reeves business model and the quality of its people,” said John King, a senior vice president at Precision.

“There is a solid cultural and strategic fit between our two businesses resulting in a combined company that is greater than either business could achieve separately,” he said.

Reeves’ chief executive officer, Rob Hyde, said his firm’s “unique technology and entrepreneurial spirit coupled with Precision’s broad offering and international infrastructure provides a great catalyst for expansion and extended market access.”

Reeves, which employs 490 people, has operations in Canada, the United States, Europe, Africa and Australia. Precision employs more than 10,000 people and operates in 30 countries.

The GlobalSanteFe deal added 31 rigs to Precision’s worldwide fleet, making it the third largest land-based international driller with 50 rigs operating outside Canada.Controlling more than one-third of the drilling business in Canada, the company had little choice but to go global, Miles Lich, an analyst at Peters & Co., said last month.

Net earnings for the three months rose to C$101 million from C$83 million a year earlier and revenues rose to C$665 million from C$588 million, partly because its Venezuela business picked up after a general strike last year.