Smith International (SII) through one of its subsidiaries – PathFinder Energy Services – won a contract from Brazil’s oil giant Petrobras (PBR). The contract represents an estimated $80 million to $100 million of revenue over the 3-year term.
PathFinder will also buy all related directional drilling assets from San Antonio International do Brasil. Although PathFinder has been working for Petrobras in Brazil for several years, San Antonio had previously been the lead contractor through which PathFinder served clients in that country.
The contract provides a significant operating base for Smith. Given the increasing use of more sophisticated lateral drilling techniques, demand for the Pathfinder’s directional MWD (measurement-while-drilling) and LWD (logging-while-drilling) services is expected to hold up reasonably well.
While Smith’s recent quarter results came in significantly below expectations, the PathFinder business continued to gain ground. In addition to its operations in Brazil, PathFinder has operations in the United States, Canada, the North Sea, Egypt, Saudi Arabia, Mexico, Bolivia, Romania and Kazakhstan.
We believe that the combination of Pathfinder expertise with Smith’s proprietary drilling technology will help give the company a sustainable competitive edge.
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Read the full analyst report on “PBR”
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