National Energy Services Reunited Corp. (“NESR” or “the Company”) (NASDAQ:NESR)(NASDAQ:NESRW), an international, industry-leading provider of integrated energy services in the Middle East, North Africa (“MENA”) and Asia Pacific regions, today announced that it has agreed to acquire a minority stake in W. D. Von Gonten Engineering LLC (“WDVG”), a premier Reservoir Characterization and Geological & Geophysical (“G&G”) laboratory and consulting business formed from the merger of W. D. Von Gonten Laboratories LLC and W. D. Von Gonten & Co. Petroleum Engineering Consulting.
This acquisition, valued at approximately 4 times estimated 2022 EBITDA, was funded mainly through issuing NESR shares valued at $10 per share, and a minority portion of cash. It represents a business that is both well positioned for outsized market growth in the coming years, and significantly enhances NESR’s capabilities in petroleum engineering studies, core analysis, reservoir modeling & simulation, and associated consulting services in the MENA region. NESR will also have the sole option to acquire additional stake and become the majority owner of WDVG in subsequent years. Meanwhile, NESR will receive state of the art custom laboratory equipment that will ensure completing its vision of having the most advanced Research and Development center in the region focused on unconventional studies in NESR’s Oilfield Research Facility (“NORI”) in the heart of Saudi Arabia’s Dhahran Techno Valley later this year.
WDVG CEO and President Bill Von Gonten commented, “I am very pleased to see this transaction close with NESR as this will allow both WDVG Consulting and WDVG Labs to expand in one of the key growth regions over the next decade. WDVG today has a very long history in North America and a commanding position for the high-end specialized core analysis and studies in Latin America. With this transaction, we will add another pillar to our global position. Over the last year, with the help of NESR’s open and collaborative MENA platform, we have made significant inroads with customers in the region and are at the forefront of secular development trends beyond just conventional oil production. Our specialized lab and consulting services are highly complementary to NESR’s unmatched execution capabilities, and we are excited to leverage NESR’s in-country value (“ICV”) strategy to empower similar scientific development at the local level.”
NESR Chairman and CEO Sherif Foda commented, “Bill is a visionary leader in oilfield G&G space, and since founding his business in 1995 has built an impressive track record of high-resolution core analysis from a high-caliber team of PhD scientists, specialization in geomechanics and reservoir characterization, and collaboration across a spectrum of independent oil companies, majors, IOCs, NOCs, universities, banks and private equity. This strategic addition of a truly differentiated oilfield labs & consulting business is crucial to the overall positioning of our portfolio, and we look forward to collaborating further with Bill and his team. Furthermore, the addition of WDVG’s state-of-the-art laboratory equipment in NORI in Techno Valley will enhance our collaboration with academia and enable exchange of scientists and researchers between the USA and the MENA region where we are developing joint programs to benefit from what has been achieved across the globe in the last decade. In addition, the demand for natural gas and unconventional resources is anticipated to explode in the coming years in the region, and having such expertise and cutting edge laboratory capabilities in the heart of this activity will ensure giving access to our customers for the latest technologies, testing facilities and intellectual power. Overall, we are very excited about the future of the region and this transaction will bring both tangible and intangible benefits to our customers in this multi years upcycle.”
