Wood Group acquires U.S. services company Kelchner

HOUSTON, Dec. 21 (UPI) -- Scottish oil field services company Wood Group said Monday that, for an undisclosed sum, it acquired energy field services company Kelchner Inc.

Kelchner, which has headquarters in Ohio, will operate alongside Wood Group as it works to exploit and deliver reserves locked in the Marcellus and Utica shale basins in the eastern United States.

"The acquisition of Kelchner adds to Wood Group's geographical footprint in the major U.S. shale regions, extending our presence to Marcellus and Utica, where we will leverage Kelchner's 65 years of expertise to enhance our client service provision," Dave Stewart, Wood Group PSN CEO, said in a statement.

Wood Group reported a 7.4 percent decline to $226 million in core profits during the first half of the year and a sharp decline from its production services, which it said was a reflection of lower activity in the North Sea and in U.S. shale basins.

In August, the company said it was addressing the weakened oil sector by cutting an estimated 5,000 jobs, or roughly 12 percent of its workforce.

Several major energy companies announced plans to merge with industry counterparts in an effort to navigate a market where crude oil prices are about 40 percent lower than last year. Oil field services Halliburton is expected to merge with rival Baker Hughes at some point next year.

In September, Wood Group said it would lead five joint industry projects in an effort to address challenges facing the industry. Running through 2018, the company said the joint work with operators, contractors and regulators would address with it said were "industry-wide challenges."

Wood Group, working through its U.S. division, said Kelchner Chief Executive Todd Kelchner will continue to lead the existing management team and 375 personnel after the merger.