Total Energy Unit Closes Acquisition of Saxon
This article was first published on Rigzone here
Total Energy Services Inc. subsidiary Savanna Energy Services Pty Ltd. has completed the acquisition of Saxon Energy Services Australia Pty Ltd. from SLB.
Total Energy paid $34.8 million upon completion and will pay $2.0 million, less any post-completion adjustments, on the first anniversary of completion. The acquisition was funded utilizing cash on hand and existing credit facilities, Total Energy said in a news release Thursday.
Brisbane, Australia-based Saxon owns and operates a fleet of 11 land drilling rigs. Saxon’s marketed fleet includes four 600 horsepower rigs with hook load capacities ranging from 150,000 to 200,000 pounds, and six 1,200 horsepower rigs with hook load capacities ranging from 320,000 pounds to 400,000 pounds.
The acquisition of Saxon increases Savanna Australia’s land drilling rig fleet to 16 rigs and substantially increases the depth capacity of the fleet. A seventeenth drilling rig is currently under construction for Savanna Australia and is set to begin operating in July under a long-term contract, according to the release.
Meanwhile, Total Energy reported revenue of $159.15 million (CAD 213.8 million) for the fourth quarter of 2023, compared to $157.44 million (CAD 211.5 million) in the same period in 2022, reflecting “continued stable industry conditions”.
“North American market share gains resulting from equipment upgrades and modestly improved pricing contributed to improved fourth quarter results in 2023 as compared to 2022”, the company said in a recent earnings release. However, its fourth-quarter Australian revenue was lower compared to the prior year due to lower service rig activity.
Take control of your future.
Search THOUSANDS of Oil & Gas jobs on Rigzone.com
Search Now >>
Total Energy announced a 2024 preliminary capital expenditure budget of $34.61 million (CAD 46.5 million), which includes $16.67 million (CAD 22.4 million) of growth capital. Included in 2024 growth capital is the recertification and upgrade of three Australian service rigs that are being reactivated under long-term contracts, according to the release.
Regarding the outlook for the year, Total Energy said that industry conditions remain relatively stable. “Oil and natural gas producers continue to be measured in their drilling and completion programs as they pursue acquisition opportunities and execute shareholder return strategies.”
“While recent North American natural gas spot market price weakness may adversely impact near-term natural gas drilling activity, the pending completion of several LNG [liquefied natural gas] export facilities is expected to provide relief to the North American natural gas market”, it noted.
Further, the company appointed Muhammad Yasir Nisar as Assistant Vice President for Drilling Services. Nisar is a mechanical engineer who has been employed by SLB since 2006 in various roles of increasing responsibility within SLB’s global land drilling business, according to the release. Most recently, Nisar was in charge of Saxon, a position he held since mid-2019.
Calgary-based Total Energy provides contract drilling services, rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia.
To contact the author, email rocky.teodoro@rigzone.com
More From Rigzone.com, The Leading Energy Platform:
