General Electric said Monday it will acquire oil-equipment company Vetco Gray for $1.9 billion from Candover, 3i & JP Morgan Partners.
Vetco supplies drilling, completion and production equipment for on- and offshore oil and gas fields, including subsea applications. The business, which is expected to generate over $1.6 billion of sales in 2006, employs 5,000 people in more than 30 countries.
Major products include flow control valves, control systems, wellheads, manifolds, risers and associated after-market services.
“This acquisition enables GE to seize faster growth in a rapidly expanding global business,” said Claudi Santiago, CEO of GE Oil & Gas. “Vetco Gray expands the portfolio of products, services and solutions available to one of the world’s most dynamic industries.”
Separately, Forest Oil said it will acquire Houston Exploration in a stock and cash transaction totaling $1.5 billion, plus the assumption of debt estimated to be $100 million.
Forest said the acquisition will create a highly concentrated and complementary set of oil and natural gas assets focused in all regions of Texas. On a pro forma basis at December 31, 2005, the company would have estimated proved reserves of approximately 2.0 trillion cubic feet of natural gas equivalents, of which about 69 percent would be classified as proved developed and approximately 70 percent would be natural gas.
"We are undertaking this significant acquisition to further strengthen our onshore North American asset base and to add drilling inventory for our proven acquire and exploit strategy," said H. Craig Clark, Forest's President and Chief Executive Officer. "This acquisition will add in excess of 3,200 drillsites to our existing inventory. Furthermore, these assets are located in tight gas sand basins in which we have extensive experience and have recently benefited from new technological applications like horizontal drilling and fracture stimulation."
The company also said it plans to sell its Alaskan entity this year in order to reduce leverage and further narrow its geographic focus.
