"NEPTUNE PREPARES TO DIVE INTO NORTH SEA SERVICES"
Oil and gas engineering company Neptune Marine is preparing to reveal its eighth bolt on acquisition in just over a year and observers increasingly beoieve a more ambitious union with fellow player Mermaid Marine is required to add true critical mass.
Neptune is shortly expected to announce its latest acquisition, a company servicing the oil and gas platforms of the North Sea. The latest buy is expected to have cost $20-30 million.
The global shopping spree initiated by managing director Christian Lange since he joined the company in February 2006 has resulted in the company add engineering and surveying arms to to its core underwater welding business, as well as establishing a foothold in North America.
The build-up has added dramatically to the company's income stream, with its September quarter revenue of $18.3million eclipsing the 2007 full-year result of $15.5 million.
Neptune's share price has tripled since the start of the year, with its market capitalisation now more than $200 million.
Both Neptune and Mermaid provide services to the oil and gas industry but they do not directly compete.
While Neptunes' core businesses are diving , engineering and surveying, Mermaid provides ships that help service offshore oil and gas operations.
Mr Lange acknowledged the synergies that might result from a union with Mermaid, he was reluctant to comment further.
Hartleys analys Helmut Engelhard said the services offered by Neptune and Mermaid were complementary but said Neptune would need to ensure its suite of acquisitions was properly integrated before making overtures to Mermaid.
"Mermaid would be a big step for them and I'm not sure whether Mermaid shareholders would agree that Neptune are the best ones to drive Mermaid's assets", he said. "I take my hat off to Neptune for what they have done so far, but they still need to prove that they can tie it all together and prove that the whole is worth more than its parts".
The rising oil price has been a particular boon to oil and gas companies specialising in maintenance and repair work, with the higher prices extending the lives of wells and increasing the need to keep ageing equipment maintained.
Mr Lange said he hoped to build Neptune into a service company that would fulfil roles now carried out by a range of competitors, with the Australian range of services ultimately to be offered from bases in North America and the North Sea.
NMS Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
