Well-Safe Solutions has secured a significant new £66 million investment to fund the next phase of its journey as a tier one well decommissioning company.
MW&L Capital Partners has led the new round of investment, bringing together a consortium of private investors to acquire a major stake in the business.
Expenditure on decommissioning in the UK Continental Shelf is forecast to be £15.3 billion in the next decade*. Well decommissioning accounts for approximately 49% of total spend, equating to £7.5 billion spend over the next decade. Around 5,000 wells, of which 1,000 are subsea, require to be decommissioned in the North Sea.
Well-Safe chief executive, Phil Milton, said: “This significant investment marks the beginning of our next phase of planned growth. The initial private funding from our original shareholders has enabled us to build strong foundations. We have amassed the largest concentration of well decommissioning expertise in the North Sea, secured major plug and abandonment (P&A) contracts, and are generating significant revenues from our engineering business. In addition, we have acquired our first asset, the Well-Safe Guardian which is currently being upgraded and converted into a bespoke P&A asset for the industry.”
“With the backing of MW&L and existing shareholders, we’ll be bringing the Well-Safe Guardian into operation in the first half of 2020 and looking to acquire further assets as planned to accelerate the delivery of our campaign-based approach to the plug and abandonment of wells in the North Sea and Continental Europe.”
Mr Milton explained that this was a long term investment in Well-Safe which is delivering a long term solution to one of the industry’s biggest challenges.
MW&L is a private investment vehicle providing flexible, long term capital to growth businesses. Julian Metherell, a Founding Partner of MW&L commented: “Decommissioning is one of the greatest industrial challenges we face and a sector with massive global potential.”
“Well-Safe, with its wealth of well decommissioning experience, dedicated marine P&A assets and associated equipment, is the first-of-its-kind tier one company with a complete P&A capability, and is ideally placed to capitalise on this opportunity.”
Well-Safe was launched in 2017 to provide a ground-breaking approach to safe and cost-efficient decommissioning and now employs 70 staff and around 20 contractors. As a specialist well decommissioning company it allows operators to meet the challenges and regulatory requirements around decommissioning, while significantly reducing costs.
Well-Safe Solutions was established by industry stalwarts, Alasdair Locke, Mark Patterson, and Paul Warwick. Funding from Scottish Enterprise, including investment from the Scottish Investment Bank and a regional selective assistance grant, bolstered the initial private funding provided by the major shareholders.
Alasdair Locke and Paul Warwick remain as Chairman and non-executive director respectively. Julian Metherell of MW&L joins the board which also comprises Well-Safe’s senior management and Scottish Enterprise. Founding executive director, Mark Patterson, will be stepping down following the deal.
Mr Patterson said: “I am proud to have been involved in establishing a business that has the potential to revolutionise how we tackle well decommissioning safely, responsibly and cost-effectively. When embarking on this venture, I wanted to get the business onto the best footing, launching the brand and creating the right environment to attract the most experienced people in the industry to form a centre of excellence in P&A. With these accomplished and the first tranche of major external investment in place, the time is now right for me to step down and leave the business in safe and expert hands.”