High Arctic Energy Services is expanding its snubbing fleet by 70 percent and positioning for expansion in the U.S. through an acquisition from Precision Drilling.
The company says the trend toward longer well bores and increased number of stages in each well bore has increased the demand for pressure control equipment required for well completions.
High Arctic is buying 12 snubbing units from Precision, increasing its fleet from 17 to 29 units.
It is also acquiring certain patent rights related to the design and configuration of stand-alone snubbing units and spare equipment.
The purchase price is $8.25 million, which High Arctic says it will fund with cash on hand.
The deal gives the company Canada’s largest snubbing fleet. It will also “provide additional capacity to further strategic diversification and growth in the United States,” High Arctic said in a statement.
The purchase complements its $9.4-million acquisition of Powerstroke Well Control in August 2018, which gave it entry into the United States.
“The acquisition reinforces and further enables our strategy to deploying underperforming equipment located in Canada to the United States where the equipment can earn a reasonable return through better day rates and utilization,” said High Arctic CEO Cameron Bailey.
“We are particularly excited about our ability to continue to build upon the initial success we have had with offering our services in the United States and capitalize on our increased market share in Canada.”