PRIVATE equity fund Epi-V is investing £4.5million in what it claims is the only “independent” supplier of advanced well intervention tools to the global oil industry in return for a “significant” slice of the firm.
Stavanger-based Petrotools specialises in advanced coiled tubing, wireline intervention and drilling tools used in the well production process.
The firm supplies major international service companies such as Schlumberger, Expro, Seawell, Baker, Aker Solution and QServ. It is also preferred supplier to a number of majors active in the North Sea, including StatoilHydro, Total, Talisman and ConocoPhillips.
Petrotools was set up in 2007 to commercialise a suite of technology which had been successfully developed and field tested by Leading Edge Technology Park, a Norwegian business incubator focused on developing early-stage oil&gas technology.
Epi-V says that, in its first 12 months of full commercial trading, the Norwegian firm generated “significant” revenues, and the business recently opened an office and service facility in Aberdeen.
The deal is designed to provide Petrotools with the strategic expertise and growth capital required to broaden its product portfolio, move into equipment rental and servicing and market its products in the US, the Middle East and Asia.
Nigel Leggett, the Epi-V partner who led the investment, said: “Petrotools is recognised as one of the foremost engineering and technology businesses in Norway and has earned a reputation of supplying tools that provide outstanding performance and quality. With global adoption of new technology increasing, well intervention has become one of the fastest expanding service sectors in the oil industry, experiencing 18% year-on-year growth.
“The drilling and fishing tools market is also experiencing a compounded annual growth rate of 13%.
“We’ll be working closely with the management team to ensure they can access the funding, expertise and contacts which will enable them to make the most of the opportunities that lie ahead.”
Per Gunnar Vigre, CEO of Leading Edge Technology Park, said Petrotools had received “numerous” approaches from private equity firms looking to pump money into the business, but that Epi-V had won the day as it was able to demonstrate an appropriate track record.
The £50million Epi-V fund was launched in August, 2007, with the aim of making equity investments of up to £20million in emerging technology and service companies within the upstream services sector.