Archer has entered into an agreement to acquire Wellbore Fishing & Rental Tools, (WFR). WFR is a US based well technology player focused on fishing operation in the oil and gas sector. Fishing operations include multiple activities during the well life cycle, including the removal of stuck equipment, pipe, completion, downhole tools, casing, and liners for intervention, as well as workover and P&A operations.

The acquisition of WFR is well aligned with Archer’s strategy and the transaction yields robust financial returns. This acquisition will strengthen Archer’s presence in the Gulf of Mexico and position us for the estimated $18 billion deep water P&A market emerging in the Gulf of Mexico. It will also build upon Archer’s relationship with global majors in the region. 

WFR’s 2024 revenue is expected to reach approximately $45 million, with an EBITDA margin above 30%, and cash contribution (EBITDA less capex) of 90% of EBITDA for the last 3 years. Archer sees clear and tangible cost and revenue synergies, as the WFR service offering and projects serve as attractive sales channels for many of Archer’s high-end plug, slot recovery, and P&A services. The WFR acquisition is estimated to have a payback of approximately 3 years, improve Archer’s 2025 EBITDA by 10-15%, and increase Archer’s cash flow to equity on average by $15-20 million annually over the first few years. 

Total consideration for the acquisition is $51.5 million, which will be financed through an equity capital raise of $40m, $10 million worth of shares issued to the existing owners of WFR based on 60-day volume-weighted average price at closing of the acquisition, and cash at hand. 

The acquisition of WFR is expected to be closed shortly after the Special General Meeting expected to be summoned shortly after the Equity Raise.

KeyFacts Energy Industry Directory: Archer   l   KeyFacts Energy: Acquisitions & Mergers news