Reservoir expansion nets Omega

Published on Wednesday 16 April 2008 21:40

RESERVOIR Group, the recently-formed oil drilling business, yesterday said it was committed to making further acquisitions after completing its third deal in ten months.

The firm, which is backed by a US private equity company, has snapped up Aberdeen-based Omega Data Services amid soaring oil prices and a wave of consolidation in the oil services sector.

Omega specialises in the design and manufacture of memory tools and gauges for pressure and temperature surveys. While the value of the deal was not disclosed, the firm has a turnover of about $6 million (3m) and employs 12 staff.

Reservoir burst on to the oil and gas scene last year with the 20m acquisition of Aberdeen-based Corpro, which was founded in the late 1980s. The deal provided the foundations for Reservoir to build a "global business focused on down-hole drilling products and services". It is targeting turnover of 250m within five years.

Corpro specialises in extracting "cores" – samples of rock – and bringing them to the surface. Geologists then analyse the cores to help oil and gas operators, including the likes of BP, Total and Chevron, pinpoint the location of reserves and work out how best to exploit them.

Reservoir chief executive Pascal Bartette, formerly managing director of Corpro, said the addition of Omega marked the new venture's first step into the areas of completion and production tools and services.

"Together these two distinct areas will allow us to provide a much broader spectrum of services than the oil and gas industry currently has available to it," he said.

"Equally, they spread the risk for the group in that while drilling is very cyclical, production and stimulation activity is far less affected by oil price.

"As part of the Reservoir group, we anticipate Omega will be able to quickly replicate its performance in other oil and gas provinces through our international network."

Omega's management team and staff will remain in place under the Reservoir Group banner.

Managing director Neil Matheson said: "I am pleased that this deal gives Omega the platform for more rapid international growth."

Reservoir is backed by Houston-based private equity outfit SCF Partners, which last year opened an Aberdeen office.

Bartette said the fast-growing drilling business was targeting a number of "independent market leaders within specialist sectors" as it looks to widen its range of products and services.

"We are building a critical mass that will improve our global reach," he added.

Royal Bank of Scotland provided part of the funding for the Omega deal. John Heiton, director of structured finance at the bank's Aberdeen operation, said: "This latest transaction extends what has already proved to be an excellent working relationship between RBS and Reservoir Group."