Schlumberger Ltd. SLB declared that it has acquired France-based engineering, manufacturing and service company, Saltel Industries.
The acquired company provides expandable patches and steel packers technology for the oil and gas industry. Over the last few years, Saltel Industries specialized and gained recognition for its steel patches or packer technology applications used in inflatable packers and expandable tubulars.
The company is well known for the proper distribution of expandable steel patches with effective water shut-off applications to restore production in wells. The new technology for external casing packers is much more preferred than the traditional inflatable packers as it lowers both operational risk and cost in cementing operations.
Hence, the acquisition is expected to be accretive to Schlumberger’s technology portfolio in the growing completions remedial services market. The acquirer is set to substantially benefit from the exclusive expandable steel packer technology of Saltel Industries that has the potential to upset the openhole isolation market.
The combination of Saltel Industries’ innovative steel expandable technology with Schlumberger’s strong technology integration capability will provide exclusive well integrity and zonal isolation applications to customers.
Moreover, we expect Schlumberger's combination of a strong balance sheet, technological leadership and efficient management to prove beneficial in the long term. In fact, we note that the company was able to brave the weakness in hydraulic fracturing pricing and land drilling activity across North America on the back of its superior technology, internal efficiency gains and size. The company’s efforts to increase its capacity in pressure pumping and strengthening deepwater activity in the Gulf of Mexico are likely to add to its revenues, going forward.
Currently, Schlumberger carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the oil and gas sector include CVR Refining, LP CVRR, Sasol Ltd. SSL and Braskem S.A. BAK. All these stocks sport a Zacks Rank #1 (Strong Buy).
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