Enersol Acquires Deep Well Services for $223 Million

Enersol, a joint venture between ADNOC Drilling and Alpha Dhabi, has acquired a 95% equity stake in the Pennsylvania headquartered Deep Well Services (DWS), for approximately $223 million including performance-based payments.

The completion of the transaction is subject to obtaining the necessary regulatory approvals and other customary conditions precedent, ADNOC Drilling said in a regulatory filing with Abu Dhabi Securities Exchange last evening.

This is Enersol’s fourth acquisition, having previously agreed to acquire, subject to regulatory approvals, EV, a downhole visual analytics company, a 51% stake of NTS Amega, a leading global manufacturer of advanced precision equipment and solutions provider for the energy sector, and a 67% stake in Gordon Technologies, a US-based provider of measurement while drilling services.

Enersol was created to generate change in the oilfield and energy services industries by acquiring and growing companies with the latest sector specific technology. With a mission to raise the standards of the sector, through improved efficiencies, safety and growth.

DWS specialises in several advanced technologies and services within the energy sector. Its patented Hydraulic Completion Units (HCU) are designed for high-pressure, long lateral, and multi-well completion operations, enabled by its data analytics software, BoreSite and its training and development, which offers globally accredited programs that enhance operational safety and efficiency.

DWS has additionally established joint venture; AutoSep Technologies, which focuses on automating flow-back operations. DWS works in numerous basins across North America and its services has been adopted by over 70 E&P companies ranging from small-private operators to large-cap national energy companies.

DWS, through Enersol, will play a role in contributing to the development of the UAE’s conventional and unconventional energy resources. Enersol companies will also support the delivery of ADNOC Drilling’s recent $1.7 billion contract award to deliver 144 unconventional wells to ADNOC Group by leveraging the various technologies available to it.

DWS Financial Performance

For the full year 2023 DWS delivered strong financial performance, with revenue over $205 million. It also delivered a robust EBITDA margin and is expected to yield free cash flow of more than 10%, ADNOC Drilling said.

DWS’s attractive operational and financial profile is aligned with Enersol’s acquisition strategy to acquire, and invest in, multiple businesses and foster a scalable portfolio, enhancing market value and optimising operational efficiencies.

The acquisition serves as an additional marker in building Enersol’s next-generation technology portfolio, which will present the JV with an additional avenue for growth across untapped markets as well as further upside potential in the long term.

ADNOC Drilling is also looking to buy companies with operations in Kuwait and Oman as it looks to expand beyond its core operations in the UAE.

ADNOC Drilling wants to focus its expansion plans on the Middle East for its growth potential and isn’t looking for deals outside the region, Chief Financial Officer Youssef Salem told Bloomberg in an interview on the side lines of the ongoing ADIPEC Summit in Abu Dhabi. The company currently drills mostly for its parent company ADNOC, the report added.