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H&P in $100m Motive deal

US rig contractor to expand automated drilling services with acquisition

US driller Helmerich & Payne is venturing into the realm of automated drilling services with the acquisition of directional drilling equipment provider Motive Drilling Technologies.

H&P will pay $75 million when the deal closes, expected in June, and up to $25 million more in potential earnout payments based on future performance over the next few years, according to a release.

In return, the company will get Motive's proprietary Bit Guidance System, which uses cognitive computing to guide the directional drilling process.

"This algorithm-driven system considers the total economic consequences of directional drilling decisions and has proven to consistently lower drilling costs through more efficient drilling and increase hydrocarbon production through smoother wellbores and more accurate well placement," according to the release. 

Dallas-based Motive was formed in 2011 by Hunt Energy Enterprises and eventually received financial and development support from partners Formation 8 and GE Ventures. Its technology has been used on more than 200 horizontal wells.

"Improving the directional drilling process has been an industry focus for some time given the value proposition of drilling wells more efficiently and with greater accuracy, resulting in a better quality wellbore," H&P chief executive John Lindsay said.

"We believe Motive’s directional drilling technology to be leading edge and high-potential for the industry and it has been successfully adopted by both exploration and production (E&P) operators and directional drillers. Going forward, Motive will continue to be available to all E&P operators and directional drilling service providers regardless of which drilling rig contractor is used."