First operational run of new, high temperature, DC electronics

Welltec has recently completed the first logging job with the newly developed DC electronics for the Well Tractor.

An operator needed to perform a casing inspection log for scale build-up across the perforations of a high temperature, cased hole, horizontal well, in the Haynesville Shale. They selected Welltec for the job due to our existing, AC e-line capabilities. During job planning it was suggested to try the new HT, DC Well Tractor, to which the client agreed.

Prior to load out a thorough System Integration Test was successfully conducted to test the compatibility with the e-line provider’s equipment and cable.
The toolstring was run in hole with the Well Tractor and logging tool to the kick-off point at about 11,581 ft. (3,530 m), at which point the operator began pumping well fluid at ~1 bpm to help keep the temperature within limits. The Well Tractor was engaged and conveyed the toolstring ~1000 ft. (~300 m) further before activating the ultrasonic tool for the caliper and bond information required around the perforations. A temperature strip in the electronics’ housing recorded the maximum temperature reached in the well, 335°F (160°C).

The Well Tractor and DC electronics handled the high temperatures with no complications, proving its applicability to extreme environments. The operator achieved their objective and acquired data across the perforations to gain a better understanding of the downhole conditions and the scale buildup levels.

To read more about this operation, please see the full case story, or read more on Welltec’s Conveyance Solutions in our brochure.


Interim Report Q1 – 2013

INTERIM REPORT Q1 – 2013

Welltec’s revenue growth eased in the first quarter following the exceptional performance in the third and fourth quarters of 2012. EBITDA was reduced due to a combination of lower quarterly revenues and the significant investments in operational capacity in order to deliver the continued growth. As seen in previous quarters, this front-loading of additional costs has a short-term impact on margins and is a consequence of the continued growth cycle. Accordingly, Welltec® upholds its revenue and earnings forecast for the full-year.
Revenue increased by 18% year on year to DKK 428 million with all regions again contributing:
In Europe, Middle East, Africa and Russia CIS (EMEAR), revenues increased by 12% to DKK 220 million
Revenues in the Americas rose by 18% to DKK 152 million
Asia Pacific recorded a revenue increase of 46% to DKK 56 million
Welltec® posted an 11% decrease in EBITDA to DKK 154 million, equating to an EBITDA margin of 36% (48% in 2012)
Operating profit (EBIT) decreased to DKK 79 million (DKK 108 million)
Welltec® maintains its full-year revenue forecast in the range of DKK 2.1-2.3 billion (24%-35% growth) and holds expectations of an EBITDA margin at or around recent historic levels.
Jørgen Hallundbæk, CEO: “During the first quarter we have continued to see many positive developments around the world. In India, our e-line technologies are increasing production without the need for a rig or coiled tubing unit, proving our value proposition in the early stages of our partnerships there. Also in the Middle East, with another successful deployment of our award winning Well CutterTM tool. With the investments made in recent quarters, Welltec® is well positioned to deliver the growth planned for 2013 and beyond.”

Investor conference call
Welltec® will discuss its results during an investor conference call today at 5 pm CET. An accompanying slide presentation is available on the “Investors” section of www.welltec.com under the subheading “Download Center”. A Danish version of these key highlights can also be downloaded. The conference call can be accessed by dialling in a few minutes before the 5 pm CET start and informing the operator that you are dialling in for Welltec’s investor conference call, conference ID 53914435.

Conference access numbers
Denmark: +45 32 72 80 18
UK: +44 8445 718 957
US: +1 866 682 8490
The presentation and a web-cast recording of the investor conference call will be available online following today’s live transmission.

For further information, please contact:
Jesper Helmuth Larsen, Chief Financial Officer, mobile: +45 23 29 26 00
Morten Græsbøll Ottesen, Investor Relations Director, mobile: +45 22 33 73 08

Company Profile
Welltec®is a leading provider of robotic intervention services and completion solutions to the oil and gas industry. Our pioneering technology enables operators to optimize their use of oil and gas resources throughout the life-cycle of their wells. We address the factors that maximize value creation, continuously innovating to reduce well construction time, speed up access to the hydrocarbons and reduce the capital expenditure burden of more conventional methods. The effect is one of maximizing oil and gas production while minimizing operating down-time.

This is the essence of Welltec’s philosophy; to challenge existing practices and think laterally in order to develop products and services which increase oil and gas recovery while improving the economic, environmental and safety aspects of our industry. In practice we develop, test and manufacture state-of-the art technology to enhance the recovery and production rates for our clients, thereby improving their profitability through a longer term revenue stream.

Our intervention solutions allow our customers, some of the world’s largest national and independent oil companies, to pursue fields that would not otherwise be economically viable. Our lightweight technology delivers more efficient, more effective, more productive and safer interventions in environments that are becoming increasingly complex, remote and hostile.

In an industry characterized by maturing fields and increasing depletion rates, the premium attached to technology which aids in reversing these trends is continuing to gain momentum. Our value proposition is compelling; our technology enables clients to unlock more production from their assets and to address reservoir complexities and uncertainties with a greater number of options.

Important Notices
Any statement in this announcement that is not a historical fact is a “forward-looking statement”. Such statements may include opinions and expectations regarding the Company and its future business, management’s confidence and strategies as well as details of management’s expectations of new and existing programs, technology and market conditions. These forward-looking statements rely on assumptions concerning future events that are subject to a number of risks and uncertainties, many of which are outside the Company’s control, and which could cause the Company’s actual results to be materially different from these forward-looking statements. While the Company believes that its assumptions concerning future events are reasonable, there are inherent difficulties in predicting certain important factors that could impact the future performance or results of the Company’s business. Accordingly, such statements should not be regarded as representations as to whether such anticipated events will occur nor that expected objectives will be achieved. The Company expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise..


Jørgen Hallundbæk cuts the ribbon on new Houston facility

The Grand Opening of Welltec’s new Houston facility in Katy was attended by a number of clients and business partners. Jørgen Hallundbæk, founder and CEO of Welltec, welcomed guests and employees before cutting the ribbon and welcoming all inside for a reception and tour.

“Our growth in the US, Canada and Latin America has created the need for expansion to accommodate increases to our staff as well as improve our maintenance facilities. I’m proud to open this new base, which will be our Headquarters for the America’s going forward. From this facility we have the work space and facilities to continue delivering world class service for our North and South American clients,” said Jørgen Hallundbæk.

Attending the opening were representatives from the Danish American Chamber of Commerce, the Danish consulate, the Katy Area Economic Development Council, EastGroup Properties and a Danish delegation representing Esbjerg City, Port and Business Development Center (DK), in addition to a number of clients and Welltec employees from around the globe.

The new base, situated in the new West Energy Corridor at the Grand Parkway and West Katy Freeway, includes space for management, sales, operations, administration, maintenance and training.


Q1-2013 Report and Investor Conference Call announcement.

Welltec will disclose its interim quarterly financial report for Q1-2013 on Thursday 16 May 2013 and will discuss the results during an investor conference call.

The investor conference call will take place on Thursday 16 May 2013 at 5 pm CET.

An accompanying slide presentation will be available on the “Investor” section of Welltec’s website at www.welltec.com under the subheading “Download Centre” before the teleconference.

The conference call can be accessed by dialing in a few minutes before the 5 pm CET start and informing the operator that you are dialing in for Welltec’s investor conference call, conference ID 53914435.

Conference Call Access Numbers:
Denmark: +45-32728018
United Kingdom: +44-8445-718-957
USA: +1-866-682-8490

For further information, please contact:
Jesper Helmuth Larsen, CFO, Cell: +45 2329 2600

Company Profile
Welltec® is a leading provider of robotic intervention services and completion solutions to the oil and gas industry. Our pioneering technology enables operators to optimize their use of oil and gas resources throughout the life-cycle of their wells. We address the factors that maximize value creation, continuously innovating to reduce well construction time, speed up access to the hydrocarbons and reduce the capital expenditure burden of more conventional methods. The effect is one of maximizing oil and gas production while minimizing operating down-time.

This is the essence of Welltec’s philosophy; to challenge existing practices and think laterally in order to develop products and services which increase oil and gas recovery while improving the economic, environmental and safety aspects of our industry. In practice we develop, test and manufacture state- of-the-art technology to enhance the recovery and production rates for our clients, thereby improving their profitability through a longer term revenue stream.

Our intervention solutions allow our customers, some of the world’s largest national and independent oil companies, to pursue fields that would not otherwise be economically viable.
Our lightweight technology delivers more efficient, more effective, more productive and safer interventions in environments that are becoming increasingly complex, remote and hostile.

In an industry characterized by maturing fields and increasing depletion rates, the premium attached to technology which aids in reversing these trends is continuing to gain momentum. Our value proposition is compelling; our technology enables clients to unlock more production from their assets and to address reservoir complexities and uncertainties with a greater number of options.


Removing lock mandrel to return well to production

An operator, offshore India’s East Coast, needed to remove a thru tubing sand screen (TTSS) in a well that was being converted to injector. The TTSS was placed thru a 3.5″ QX Lock Mandrel which was set on a 3.5″ SSD nipple.

A slickline operation had been unable to remove the TTSS even after more than 300 attempts of jarring. After thorough risk assessment and testing at the Welltec® yard, Welltec® mobilized to the well site. This was a platform, which in addition to crane and space limitations, had daylight only restrictions. It was Welltecs first operation of releasing a Lock Mandrel in the Asia Pacific region. The first run revealed debris on top of the sand screen and a clean-out run was performed with a Well Cleaner® PST High Volume. The subsequent run with the Well Stroker® successfully retrieved the TTSS and the operation was completed in a single day.

Downtime was reduced to just five days and the operator avoided having to mobilize heavy equipment with a much larger footprint. During subsequent well testing, well injection of 22,000 bwpd was achieved compared to 0 with TTSS in the well. The well is now ready for the operator to convert to an injector which will facilitate an increase in production from the depleting field.

To learn more about the technology applied please view the Clean-out Solutions brochure or Mechanical Solutions brochure or read the full case story: Removing lock mandrel to return the well to production.


Welltec popular in Kazakhstan

The Welltec booth was popular at the recent Atyrau Oil & Gas show in Kazakhstan, 16-18 April, 2013. Many visitors dropped by to discuss our technologies and they were keen to learn more about our inherently safer intervention solutions. Specifically, our Clean-out and Conveyance Solutions were of particular interest. The visitors represented a broad selection of the industry: from operators and logging companies, to pipeline services and training centers. This event also marked the introduction of our new, Russian brochure.

Please click here to download the Russian brochure.


Record turnout at Welltec sponsored SPE Copenhagen meeting

Welltec sponsored the April gathering of the SPE Copenhagen section inviting members to the charming Copenhagen Admiral hotel and conference center, where the members enjoyed two highly interesting presentations and a unique opportunity to meet some of the minds behind the Welltec Annular Barrier (WAB™). This is a novel, completion solution recently launched by Welltec at IADC in Amsterdam, as a first step in the developing the Flex-Well™ concept.

After a cocktail reception, Paul Hazel, VP Completion Solutions began the evening by presenting the vision of the Flex-Well™, a simple, flexible completion style for retaining access to the sand face while building simple wells or multi-lateral, extended reach wells.

Following dinner, Henrik Nicolaisen of Total E&P Denmark took the participants through project to explore opportunities for shale gas in Denmark, sharing some of the local challenges as well as global successes for perspective.

The evening offered interesting, thought-provoking knowledge sharing and a good opportunity for networking with industry peers. The turnout exceeded all expectations and Welltec would like to thank all who joined us at the event, making the evening a great success.

To read more about the WAB™, please go to the Solution webpage or download the Completion Solutions brochure or case story High pressure cementless zonal acid stimulation.


No vacant seats at SPE Bergen presentation

The Welltec stand was popular at the recent SPE Bergen one day seminar. Featuring interesting technical discussions and a good number of experts, we had a good response from the visitors. Our technical presentation on the First Nipple Profile Milling using 218 E-line Tools was well received and filled the largest of the conference rooms with no vacant seats.

To read more about this case story, please click here.


Welltec delivers technology

Once again Welltec had a great show at ICoTA, this year emphasized by winning the Intervention Technology Award with our latest innovation: The Well Cutter™. The exhibition overall ended with a record turnout and visitors to our stand were impressed by Welltec’s technical capabilities.

Intervention Technology Award Winner
Welltec received distinguished attention this year when the Senior Chairman of ICoTA presented the Intervention Technology Award to Alex McKay on behalf of Welltec for the Well Cutter™. This is a novel tool that enables efficient and safe drill pipe, liner, tubing, packer and casing recovery operations without the need for explosives. The winner’s trophy – the ‘Quaich’ – exhibited at our stand, drew a lot of interest, and the longstanding Scottish tradition of sharing scotch in the Quaich was honored during a dinner event, where clients, partners and employees joined us in celebration.

Technical Content
Welltec was the technology behind five SPE papers, which were presented by operators, one of which featured the Well Cutter™. Also drawing attention from service providers and operators alike was content on Welltec’s unique Clean-out and Milling solutions.

SPE 163890: Electric-Line Pipe-Cutting Operation Optimizes Completion Removal, Offshore Russia by Howard Otten and Bill Connon (Sakhalin Energy), Alex McKay, Kirill Kirsanov and Moray McGillivray (Welltec).

SPE 163925: Optimal Sand Cleaning Algorithms for Planning and Executing Electric Wireline Suction Tool Operations by W. Nunez (OXY Colombia), L. Perez, B. Schwanitz (Welltec).

SPE 163939: Electric-Line Milling System Removes Stuck Frac Sleeve without Damaging the Subsurface Safety Valve Landing Nipple by Josiah Igwe (BP), Carl Diller and Robert (Bob) Harris (Northern Solutions), and Jeremy Albright and Jesper Lykkebo (Welltec).

SPE 163931: Using Electric-Line Tools to Clean Wellbore Laterals and Perforate Toes by L.D. Gomez (Welltec), N. Miller, and K. Binnion (Marathon Oil Corporation).

SPE 163943: Retrieval of an Inflatable Plug Using Only Slickline and Electric-Line Technology by Ben Smith, Jeffrey Stricker, Kevin Reckert (Shell), Floyd Thibodeaux (Baker Hughes), and James Greenlee, Angel Luviano, and Duane Kent (Welltec).

The ICoTA Coiled Tubing and Well Intervention Conference takes place every year in the Woodlands, Texas. It is one of the global E&P industry’s foremost venues for the latest intervention technologies, electric line, slickline, hydraulic workover and coiled tubing used in the well servicing industry.


The Flex-Well™ takes a big step forward

The industry received Welltec’s new technology for cementless completions and zonal isolation with much excitement and positive feedback at the SPE/IADC Conference and Exhibition in Amsterdam, March 5-7th.

“With the introduction of the Welltec Annular Barrier, the Flex-Well vision becomes a reality. We have been looking forward to this launch for years,” says Paul Hazel, VP Well Completion Solutions at Welltec, and explains: “The Flex-Well™ concept significantly reduces total well construction, risk, time and costs, maximizes early production and increases ultimate recoverables without compromising the long-term well integrity. It delivers inherently safer wells.”

The WAB™ is the first of its kind in the market; a new generation, all metal, expandable barrier, designed for life-of-well, that enables cementless completion and zonal isolation under a wide range of operating environments. The WAB™ for zonal isolation has been tested to withstand conditions up to 10K Delta P and 300°C, and can set in minutes. Many of the shortcomings of current open hole or cased hole packers are eliminated with the introduction of the WAB™. It is nimble and rugged to install and provides a much higher reliability and success ratio both in the short-term as well as the long-term.

“We had a very successful launch of The WAB™ – it was well received. We experienced great interest due to its unique capabilities and the prospect of the whole Flex-Well™ solution. It clearly fulfills a need among the operators and we are proud to once again push the boundaries beyond what was thought to be possible only a few years back!” says Paul Hazel and concludes: “We could not have done this without our excellent and dedicated employees, and the cooperation of the various operators who have been involved.”

IADC is the International Association of Drilling Contractors
SPE is the Society of Petroleum Engineers