General Electric Company (NYSE:GE) a lift is all it takes
General Electric Company (NYSE:GE) announced that it has now completed the Lufkin Industries, Inc. acquisition for around $3.3 billion. The latter is a leader in the field of artificial lift technologies used in the oil and gas industry. It also manufactures industrial gears Lufkin, Texas. This move expands GE’s artificial-lift capabilities and provides solutions for a larger variety of well-types as well as technology for optimization and production automation in the drilling industry.
On 27 June, Lufkin’s shareholders voted for the transaction. The shareholders will be receiving $88.50/ share in cash for every Lufkin share they own. Lufkin has around 4,500 employees in over 40 countries and it manufactures and services an expansive portfolio of artificial-lift equipment via a global network of over 110 service-centers and 9 manufacturing facilities. Artificial lifts are used in 94% of the close to 1M oil-producing wells across the globe. GE has been very active in artificial-lifts with electric submersible pumps. It will now have additional capabilities such as gas lift, rod lift, plunger lift, hydraulic lift, as well as a sophisticated range of well software and controls.
What are artificial lifts?
Numerous countries and regions across the world have either inaccessible or inadequate data reporting or recording systems. This makes it very difficult to estimate the number of the producing wells in the world. Globally, there may be well over a million of them. Of these only around 5% flow naturally while the balance 95% rely on one or the other kind of artificial lift at some point or the other, in their production cycle.
These artificial lifts are needed in oil wells when the pressure in the reservoir is not sufficient to lift or propel the fluids that have been produced, to the surface. These lifts are also very commonly used for dewatering oil wells. There are a wide range of artificial lift technologies. The term itself applies to various tools equipment, tools, instruments, controls, computer software and hardware, techniques and technologies that are used to increase liquids-flow from the oil wells. The lift can also be achieved mechanically with the use of a pump. Alternatively, decreasing the hydrostatic column-weight inside the well by injecting gas into that liquid can also produce the same result.