Shares of oilfield service company, Core Laboratories N.V. CLB, gained about 2% following the announcement of its takeover of pressure-volume-temperature (“PVT”) equipment and instrumentation manufacturer Sanchez Technologies. Core Laboratories added that it was an all-cash transaction. The financial details of the transaction, however, were not disclosed.
Viarmes, France-based Sanchez manufactures equipment for use in hydrocarbon reservoirs. The company is one of the leading firms in the world in terms of manufacturing automated high-pressure, high-temperature ("HPHT") mercury-free PVT instrumentation. Core Laboratories added that it has fully integrated Sanchez’s HPHT PVT system into its operations.
These equipments facilitate optimization of production streams and aid in enhancement of oil recovery techniques. These systems, when used in capital intensive, unconventional reservoirs, also maximize returns.
Core Laboratories is the only oilfield service firm capable of generating PVT data sets from reservoir fluids at depths of over 20,000 feet and pressures up to 29,000 pounds per square inch. Sanchez’s equipments and instrumentation are particularly suitable for deep reservoirs and hence, should complement Core Laboratories’ needs.
Amsterdam, Netherlands-based Core Laboratories is an oilfield services company that provides reservoir management and production enhancement services to the oil and gas industry on a global basis. Also, the company’s low asset intensive operations and limited capital needs allow it to generate substantial free cash flows.
However, weak crude prices are likely to affect financials. This is primarily because of a decline in capital spending by exploration and production firms, which in turn, is leading to reduced activity for oilfield services firms like Core Laboratories.
Currently, Core Laboratories carries a Zacks Rank #3 (Hold).
Better-ranked players from the broader energy sector include NuStar Energy L.P. NS, PetroChina Co. Ltd. PTR and CNOOC Ltd. CEO. All these stocks sport a Zacks Rank #1 (Strong Buy).
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