Calgary-based Production Plus Energy Services Inc. will create joint ventures with the world’s biggest oilfield services company to use its HEAL System in Canada and the U.S.
In a deal with Schlumberger announced today, Production Plus will contribute its HEAL System business to joint venture entities with Schlumberger in exchange for cash consideration and future contingent payments from the company. Production Plus will hold a 50.1 per cent interest in the entities and Schlumberger will hold 49.9 per cent.
The HEAL System together with the Schlumberger’s artificial lift systems will create a fully optimized lift strategy for horizontal wells, Production Plus said. The system, which offers a solution to mitigate slug flow to enables fewer, and simpler, artificial lift transitions, has consistently achieved productivity increases of more than 30 per cent in typical horizontal wells.
“In the lower commodity environment, producers are looking for proven solutions to reliably produce their wells as efficiently as possible. This joint venture will offer producer’s global accessibility, enhanced quality control and assurance, as well greater certainty for the value adding capabilities of the HEAL System,” Jeff Saponja, chief executive officer of Production Plus, said in a statement.
Horizontal wells are known to have production challenges as a result of inconsistent multiphase slug fluid flow, damaging solids and excessive gas interference. Production through the lifecycle of horizontal wells often requires complex and expensive artificial lift strategies.
With no moving parts, the HEAL System is easily integrated into standard horizontal well completions, according to Production Plus, and provides a low-cost platform to increase productivity in shale oil wells.
The patent-pending set of HEAL System configurations offers producers increased efficiency, reduced costs and the flexibility to enhance the performance of any artificial system, including ESPs, rod pumps, progressive cavity pumps and plunger lift through the life of a horizontal well, the company added.
The products in the HEAL System suite are designed to benefit a horizontal well’s entire producing life – controlling frac flowback, extending the natural flow period, simplifying transition between artificial lift phases, lowering operating expenses, eliminating intermediate artificial lift and providing a solution to damaging offset inter-wellbore communication (frac-hits).
The Production Plus board of has unanimously approved the transaction and will recommend that shareholders of Production Plus vote in favour of the transaction, which will allow Production Plus to provide a special dividend.
Additionally, the transaction will enable the HEAL System business to access global markets at a pace that Production Plus would not be able to sustain on its own and the joint ventures entities will have access to Schlumberger’s global network of technical experts, efficient operational processes and research and development resources.