If, as Warren Buffett observed, “It’s only when the tide goes out that you find who’s been swimming without a bathing suit,” it’s also true that you find out who’s got their drawers firmly pulled up round their expanding waistlines. Clearly, one such is Emerson, which, in the latest in its ongoing series of incremental acquisitions, is making an agreed bid for Norwegian upstream oil and gas measurement specialist Roxar.
Emerson’s cash offer of 5.2 Norwegian kroner (NOK) or approximately $0.735 per share, made through its wholly owned subsidiary Aegir Norge Holding AS, values Stavanger-based Roxar at some NOK1,266 million or about $179 million, to which must be added the $212 million or so of Roxar debt which Emerson expects to redeem on completion. Roxar had revenues of some $193 million in 2008. The deal, which Emerson will finance through existing cash balances, is not subject to any financing conditions.
Roxar, which is destined to become part of Emerson Process Management, has about 820 employees worldwide, working in 28 offices in 19 countries. It operates through two divisions, Flow Measurement and Software Solutions, the former providing instrumentation for well planning, monitoring and metering, and the latter 3-D reservoir interpretation, modelling and simulation software. As such, it will significantly strengthen Emerson’s upstream oil and gas offering, contributing its particular expertise in two-phase flow measurement and its offshore experience. There must, however, be some doubt whether Emerson will choose to retain the 3-D reservoir modelling and simulation capability, although Emerson Process Management CEO Steve Sonnenberg mentioned both areas of the company when he described Roxar as “a strong complement to Emerson,” adding that “Our oil and gas customers will benefit from the more complete product and service offering that will result from this strategic combination.”
A further significant step in the onward march of Coriolis technology into high- accuracy custody transfer applications comes with Emerson’s and Houston-based Flow-Cal’s joint development of data integration software which directly interfaces Micro Motion Coriolis data with Flow-Cal’s natural gas accounting software.
Flow-Cal Common File Exchange is said to provide the first simple path to enable the introduction of Coriolis meters into existing infrastructure and opens up the possibility of extensive natural gas measurement reliability improvements and cost reductions. The complete solution combines Micro Motion Coriolis meters with the Emerson FloBoss107 flow manager, ROC800 remote operations controllers and ROCLink software to deliver data in the .CFX file format developed by Flow-Cal which ensures AGA 11 and API Ch. 21.1 compliance. The Flow-Cal accounting software then completes the chain of data management to the back office. Additional options for polling the data are presently under development by SCADA system suppliers.
Coriolis meters were approved for natural gas flow measurement by AGA Report Number 11 and offer significant advantages because of their immunity to changes in flow conditions and, hence, the need for complex temperature and pressure compensation and their resistance to damage from surging or pulsating flows and foreign materials. The absence of moving parts ensures long term stability and low or zero maintenance.