Sovereign Oilfield’s Sole Focus on Fabrication

Source: Energy Digital

Date :07/05/2008 09:24:33

Graham Burgess tells Exec why Aberdeen based Sovereign Oilfield Group has decided to divest its drilling operations and concentrate on fabrication services.

Written by John O’Hanlon and Produced by Alex Smith

Neither Graham Burgess nor I could believe that nearly a year has passed since we last reviewed the progress of the AIM-listed company that he and Peter Felter established in 2003 and took public in 2005. It has been a year of solid consolidation amid global economic conditions that have sometimes been favourable, sometimes challenging but never dull.

The group was conceived in a highly entrepreneurial way to take advantage of the demand from oil and gas companies for integrated fabrication and drilling services as a kind of two-pronged approach to meeting these customers’ prime operational requirements. From the start, the strategy was to build the company by acquisition: the pre-and post-flotation acquisitions are detailed in my june 2007 exec article

Bedding in

Early 2007 saw a flurry of acquisitions, facilitated by a £50 million line of credit extended by the group’s bankers Merrill Lynch. Dunfermline-based Forfab, purchased in January, was followed in March by RDT Precision Engineering of East Kilbride and, in April, by Labtech Services and Vertec Engineering, both of Aberdeen.

Together these companies represented a large chunk of fabrication capacity, and while Sovereign has a policy of allowing its subsidiaries a fair amount of autonomy, they took a while to bed in, as Graham puts it: “We went through a quiet period during which we held back deliberately from making any further acquisitions. As a policy, when we add a company to the group we put in management teams and keep open the lines of communication but we don’t try to integrate two management teams into one. We’d look upon amalgamating the businesses…

May 07, 2008

Click here to view the corporate brochure on Sovereign Oilfield Group