Denver, CO (PRWEB) January 14, 2016
With the oil industry facing what most likely will be its worse downturn in more than 45 years, most major oil companies are taking precautionary, perhaps even extraordinary, measures to protect their financial wellbeing. Although many of the largest public oil companies have yet to cut their dividend, some have halted or begun to reduce their share buyback programs. Others are reining in the size of their projects and renegotiating supply contracts. Their signal to the market is clear; it’s time to hunker down and weather the storm.
Not so, according to Spartan Companies, a new yet well-funded, oil services company.
Based in Denver Colorado, Spartan Companies (http://www.spartancos.com) is a provider of engineering, construction, and maintenance services to the oil and gas industry. According to a recent press release, Spartan Companies is taking a new approach to oilfield management and growth and has completed an acquisition of Country Machines, LLC – a supplier of industrial rental equipment.
“Although I didn’t work closely with him, Steve Jobs was adamant about investing through economic downturns. At Apple, we invested heavily in R&D during the collapse of the tech bubble in the early 2000s. And, we all know how that story ended, “ stated Josh Fotheringham – a former Apple employee and current Chief Financial Officer of Spartan Companies. He continued, “We see a similar opportunity in today’s oil and gas industry. By being fiscally responsible yet doubling-down on valuable acquisition opportunities, we’re hopeful that Spartan Companies will be in a strong position when the price of oil returns.”
Those are big aspirations for the newly formed company. Yet Wall Street analysts are not far behind indicating that the oil downturn will likely reverse simply because the world will always need oil. And, it shouldn’t be a surprise that merger and acquisition activity will increase in anticipation of the potential rebound.
If history repeats itself, Fotheringham’s expectations for Spartan Companies might be right on track. Brendan Warn, oil and gas equity analyst at BMO Capital Markets agrees. “In the second half of 2016, if we see price stabilization [of oil], I expect companies will be looking to replace reserves inorganically, by making acquisitions.”
Brandon Stephens, CEO of Spartan Companies, not only looks at their acquisition as a future benefit, but also as an opportunity to immediately increase efficiency. “The addition of Country Machines to our services portfolio will allow Spartan Companies to provide an even more robust service offering to our customers, “ he claims. “Additionally, it provides a platform to more fully control production costs, while also expanding revenue opportunities as market conditions improve.”
Stephens also hinted at additional acquisition opportunities in 2016, “As commodity pricing remains low, we expect additional value opportunities for acquisition to be abundant. We see a tremendous opportunity for growth during this oil industry downturn.”
With history on its side, Spartan Companies may be a company worth tracking.
(Additional reporting by Karolin Schaps and Ron Bousso in London)
About Spartan Companies
Spartan Companies is a specialty oilfield service company focused on leveraging innovation and analytics to drive improved performance and results. Spartan Companies relies on a history of technology, engineering, oilfield construction and project management as the foundation for its success. Based in Denver, CO, Spartan Companies provides services to the energy industry in Colorado, Oklahoma, North Dakota, Texas, and Wyoming.
More information about Spartan Companies and their affiliates can be found on their website at http://www.spartancos.com.
All product and company names herein may be trademarks of their respective owners.
Josh Fotheringham, CFO