Red Spider Poised for Growth
Red Spider, the remote open close technology specialist delivering multi-million savings to the international oil & gas industry, has completed record levels of work in 2010 and taken on additional staff to allow further growth.
The company has increased its customer portfolio as well as winning further business from existing customers, including BP, Statoil and Shell.
Securing growth equity of £7.5million earlier this year from Energy Ventures and Simmons Parallel Energy Fund is helping Red Spider to accelerate commercialisation and roll-out of what is accepted by industry as game-changing well technology that can save operators nearly $1million during single operations.
It is also supporting a comprehensive internationalisation plan most immediately covering Asia-Pacific and the Americas, two regions with enormous scope for the specialist Remote Open Close products.
Red Spider, based in a custom-built HQ in Westhill, forecasts a 400% increase in work for eRED and additional new products by 2012, ensuring revenue increases steadily from £9.45million in 2011 to £20million in 2013. The team will also expand to around 60 staff next year and then steadily after that.
“We have a real feeling of Red Spider moving to the next level in our growth strategy,’’ said Chief Executive Steve Nicol, “The investment marks another big strategic step for the company and follows the best year yet for our business, achieving revenue growth of 70% from 2008."
“Since the investment, we have changed our strategy to be more aggressive and confident. There is a big market in Asia Pacific and North and South America and we are now able to develop the product pool we need to cover these regions properly and for the long term.
Mr Nicol added: "The investment is also fuelling the company's product development efforts in new products for our specialist market as well as sustaining and growing our existing business. In addition, the expertise, contacts and geographic spread of Energy Ventures and Simmons are making a major contribution to accelerating the company to its full potential much sooner."
Red Spider’s first product eRED® is a downhole computer controlled valve that can be opened and closed by remote control, without the need for intervention or control lines, saving time, money and removing risk.
The valve has allowed North Sea operators to save up to $900,000 during a single subsea completion operation, typically reducing slickline runs from 8 to 1. In subsea workover operations savings of up to 41 hours and $800,000 have also been recorded in a single job.
It quickly became apparent from the eRED’s continuing success that there were other potential applications for Remote Open Close Technology in the completion of wells. Further customer requests followed by investment in extensive research and development work has resulted in two new products, eRED-FB and PowerBall, both of which can deliver major time and cost savings in subsea operations, while enhancing safety.
Mr Nicol said: “eRED® has been used widely across the North Sea by a host of operators and has brought them multi-million pound savings. It’s becoming the industry standard solution for a range of downhole applications and we are confident the new additions to the product line will be widely welcomed for subsea operations thanks to the savings and reduced risk they offer.’’
A series of appointments have been made in recent months to underpin the growth strategy including Gary Connel as Chief Financial Officer, Houston-based John O’Hara as sales manager for North America and Oddvar Dalane, Stavanger-based sales manager for Scandinavia.
Most recently, an agency agreement has been concluded in Brazil to target the all-important South American market and is already showing early success.