Elemental Energies, the wells specialist which has been on a run of acquisitions, is planning even more growth to meet operator demands.
“It really starts for us now,” says CEO Mike Adams, despite the young firm already having two deals already under its belt.
Adams became CEO of Aberdeen-based Elemental Energies this year after it bought over Norwell Engineering, where he was general manager.
That followed Elemental’s initial splash in December 2022, when it bought Senergy Wells from Vysus Group.
Elemental, owned by former London financier and current CFO Michael Dafforn, has more to come.
The firm said the ownership structure “is evolving in line with growth, and we are in advanced/sensitive discussions with a number of new investors”.
Adams said: “We’re pushing hard in the Gulf of Mexico and we see that potential, certainly in decommissioning and CCS (carbon capture and storage) over the next six months, and we’re going to have some big announcements in the North Sea as well.
“We’re capitalizing on the work we’ve done in those regions. We’re hiring, bringing in new people, more acquisitions. And then, yeah, beyond that we’ll look to do the same in in other areas.”
By next summer, the firm plans to have increased headcount from its 130 current staff and contractors to 200.
Having laid foundations in the US and the UK, it later plans to push on with other regions like Asia-Pacific further down the line.
The firm has business lines in upstream, decommissioning and low carbon, with the latter two looking at major growth.
“That buy and build, acquisition-led part of the strategy is going to continue,” says Adams.
Why? Elemental Energies sees a “supermajor-led future” in the energy sector and space for a services firm to rise to growing demand from those firms.
One example of that is in decommissioning in the US Gulf where “boomerang” decommissioning liabilities are seeing supermajors – who sold the assets years ago – landed back with bills to decom old wells after the current owners go bankrupt.
Space for a big supply chain player
“We see an almost a supermajor-led future, especially in the broader energy space where the Shells, BPs, Equinors, Totals are not going anywhere. We’re backing them as successful energy businesses and their ability to do that pivot and to do it well.
“And those companies are engineering first, engineering-led clients and we’re an engineering-led business. So that’s what we’re looking to do – to acquire similar businesses that are really putting that engineering integrity first and have strong track records with those clients in key markets for us.”
Delivering growth will then allow Elemental to meet rising demand for technical engineering expertise.
“We’re seeing a resource constrained dynamic in the supermajors that we can support, but in order to do that we have to be we have to be operating in a way and at the level aligned with their view of technical excellence, process, workflows and technology to give them the comfort that they can they can genuinely partner with us and we can we can pick up that slack as needed to deliver larger and larger projects.”
Over time, Elemental sees opportunity “for a major player in our space in the supply chain to build long term relationships with major clients”.
Adams adds: “We want to help the operators deal with whatever challenge they are facing, but ultimately a challenge is leading them towards considering doing, you know, larger and larger chunks of work – they need to supply chain offering that is kind of rising to meet that challenge.
There isn’t infinite time to delay decom, says Adams, which partly drives his confidence of growth on that front, alongside long-delayed work like suspended wells in the North Sea.
But decommissioning isn’t the only line – the firm is seeing global demand for front-end engineering design (FEED) for CCS, alongside operational work in places like the UK and US.
“Exponential growth” is expected there and in growing markets like geothermal for the wells firm, while upstream exploration and production is expecting “general stability” in revenues going forward.
It’s a young business, but Adams is clear on the trajectory.
“The expansion is happening from now – forward. Everything that we’ve spent the last six months doing is building the relationship, establishing our business.
“It starts now for us here in Houston. And, to be honest, it’s the same in North Sea.”
