Bin Zayed Petroleum for Investment Ltd, one of
the foremost global companies with broad petroleum experience, will
market and distribute SDP’s patented Drill-N-Ream® wellbore
conditioning system to key end markets in the Middle East and North
Africa
Exclusive agreement provides for Bin Zayed
Petroleum to purchase approximately $13 million of Drill-N-Reams
for the Middle East
Superior Drilling Products, Inc. (NYSE American: SDPI) (“SDP” or
the “Company”), a designer and manufacturer of drilling tool
technologies, announced that its subsidiary, Hard Rock Solutions,
LLC, has entered into an exclusive channel partner and distribution
agreement with Bin Zayed Petroleum for Investment Limited (Bin
Zayed Petroleum), a Seychelles registered company. The agreement
covers the full range of sizes of SDP’s patented Drill-N-Ream®
(DNR) wellbore conditioning system for the Middle East/North Africa
(MENA) regions and will remain in effect subject to the performance
and revenue sharing targets being met during the term of the
agreement.
“We believe this relationship further validates the capabilities
of our technology, and we are thrilled to be teaming up with the
experienced Bin Zayed Petroleum team,” commented Troy Meier,
Chairman and Chief Executive Officer of SDP. “We have demonstrated
the value that our DNR provides at the well site, but given our
limited resources, our market reach has been limited, especially as
COVID-related restrictions limited travel and customer access. This
new partnership provides the DNR and importantly, our Superior
Drilling Products brand, significantly more exposure throughout the
Middle East and North African regions. We expect this will
accelerate adoption rates of the technology as we improve the
availability of, and access to, the DNR.”
The agreement provides that Bin Zayed Petroleum will purchase
DNR tools from the Company and the Company will repair and maintain
the purchased tools at an agreed repair price per tool.
Bin Zayed Petroleum will purchase approximately $13 million of
DNRs in quarterly stages over the next twelve months subject to
certain conditions that will be evaluated with each purchase
tranche. The initial tranche of purchased inventory of
approximately $4 million was effective with the execution of the
Agreement. Market penetration expectations are still being
determined and will be adjusted on a yearly basis.
Edward Envia, Chief Operating Officer, Bin Zayed Petroleum
added, “We are excited to partner with SDP and add their advanced
drilling solution to our product and service offerings. We believe
there is significant demand for the DNR, and expect customers to
adopt the technology quickly as we leverage our well-established
sales and marketing teams, and broad customer relationships.”
The DNR is a unique reaming assembly technology that increases
the drift diameter as it conditions the wellbore during the
drilling process, eliminating the requirement for a dedicated
reaming run. The MENA countries covered by the new exclusive
agreement consist of: Algeria, Bahrain, Egypt, Iran, Iraq, Israel,
Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia,
Syria, Tunisia, United Arab Emirates and Yemen.
Mr. Meier concluded, “Like our distribution agreement in North
America, this is an excellent sales model distribution relationship
that will now exist in these key end markets. We believe this
agreement enhances our ability to expand globally and, importantly,
monetizes a portion of our current fleet of DNR inventory that was
established for the Middle East.”
The revenue associated with the initial inventory purchase will
be recognized in the third quarter of 2022.
About Superior Drilling Products, Inc.
Superior Drilling Products, Inc. is an innovative, cutting-edge
drilling tool technology company providing cost saving solutions
that drive production efficiencies for the oil and natural gas
drilling industry. The Company designs, manufactures, repairs and
sells drilling tools. SDP drilling solutions include the patented
Drill-N-Ream® wellbore conditioning tool and the patented Strider™
oscillation system technology. In addition, SDP is a manufacturer
and refurbisher of PDC (polycrystalline diamond compact) drill bits
for a leading oil field service company. SDP operates a
state-of-the-art drill tool fabrication facility, where it
manufactures its solutions for the drilling industry, as well as
customers’ custom products. The Company’s strategy for growth is to
leverage its expertise in drill tool technology and innovative,
precision machining in order to broaden its product offerings and
solutions for the oil and gas industry.
Additional information about the Company can be found at:
www.sdpi.com.
Safe Harbor Regarding Forward Looking Statements
This news release contains forward-looking statements and
information that are subject to a number of risks and
uncertainties, many of which are beyond our control. All
statements, other than statements of historical fact included in
this release, including, without limitations, the success of the
distribution partnership in the MENA region, the timing and value
of any tool purchases, the ability to increase market penetration
of the DNR, the technical capabilities of the DNR, the increase in
market exposure in the Middle East, and the rate of adoption of the
DNR tool are forward-looking statements. The use of words “could,”
“believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,”
“continue,” “predict,” “potential,” “project”, “forecast,” “should”
or “plan, and similar expressions are intended to identify
forward-looking statements, although not all forward -looking
statements contain such identifying words. These statements reflect
the beliefs and expectations of the Company and are subject to
risks and uncertainties that may cause actual results to differ
materially. These risks and uncertainties include, among other
factors, the duration of the COVID-19 pandemic and related impact
on the oil and natural gas industry, the effectiveness of success
at expansion in the Middle East, options available for market
channels in North America, the deferral of the commercialization of
the Strider technology, the success of the Company’s business
strategy and prospects for growth; the market success of the
Company’s specialized tools, effectiveness of its sales efforts,
its cash flow and liquidity; financial projections and actual
operating results; the amount, nature and timing of capital
expenditures; the availability and terms of capital; competition
and government regulations; and general economic conditions. These
and other factors could adversely affect the outcome and financial
effects of the Company’s plans and described herein. The Company
undertakes no obligation to revise or update any forward-looking
statements to reflect events or circumstances after the date
hereof.
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version on businesswire.com: https://www.businesswire.com/news/home/20220628006212/en/
For more information, contact investor relations: Deborah
K. Pawlowski Kei Advisors LLC (716) 843-3908
dpawlowski@keiadvisors.com
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