Schlumberger, HEAL to Develop Production Optimization System

Schlumberger Ltd. SLB announced that it has formed a joint venture (JV) with HEAL Systems, previously Production Plus Energy Services Inc. The JV is related to the development of the company's production optimization technology and business.

The HEAL System complements existing artificial lift systems, has no moving parts and benefits a horizontal well during any phase of its life cycle. This system will help in cutting costs and make efficienct gains amid low oil prices.

The system has constantly attained productivity boost of over 30%--100% in typical horizontal wells across Western Canada and the U.S. Per the company press release, the technology has lowered operating costs in about 200 wells located in more than 35 formations across North America.

The JV, effective May 31, will separately develop its business in the U.S. and Canada, whereas, Schlumberger will be the single distributor of the HEAL System technology, outside the aforementioned regions.

Production Plus contributed its HEAL System business to the JV in return for cash consideration and future contingent payments. On the closure of the transaction, Production Plus will hold an interest of 50.1% in the JV entities, while Schlumberger will hold the remaining 49.9%.

Schlumberger is a leading oilfield services company, providing technology, project management and information services to the global oil and gas industry.  

The company is the largest oilfield services player in the world with presence in every corner of the energy markets across the world. We appreciate the company's greater reliance on international market where operations are expected to be boosted by next year.

Schlumberger's price chart is unimpressive. Shares of the company lost 17.7% over the last one year, while the Zacks categorized Oil & Gas – Field Services industry registered a decline of 16.2% in the same time span.