Archer to acquire Great White Energy Services

Global oilfield service company Archer Limited (OSE: ARCHER) (formerly Seawell Limited (OSE:SEAW), ticker was changed on May 20th) announced this morning that it has agreed to acquire Great White Energy Services, a company formed by Wexford Capital LP, for 742 million US Dollars.

The funding comes from a private placement of approximately 30 million shares to main shareholders Seadrill Limited (OSE:SDRL, NYSE:SDRL) (from which Archer, the then oil-well service division of Seadrill was spun off in 2007) and Lime Rock Partners. The issue price will be a minimum NOK 35 and Archer is up over 11% to 34.80 NOK at noontime. Archer has also received indicative proposals from existing syndicate lenders for long-term debt financing up to 400 million USD and short term bridge facilities.

The acquisition doubles Archer’s coil tubing, snubbing and directional drilling capacity in the United States. It also enables Archer to enter into rapidly expanding frac market, for Great White provices pressure pumping including fracing and nitrogen services. So while Archer is a little late into the party, it now joins to offer services for unconventional oil and natural gas fracturing services shale plays in the US.

Great White’s second quarter operating income before taxes is expected to be between $20 and $22 million and revenue to be a little over 100 million dollars. Second half expectations are for revenue in between 110 and 120 million dollars. Second half EBITDA for Great White is estimated to be in the 32 to 38 million range and is expected to improve further from Q1 2012 onwards.