(Adds details about deal, comment from analyst note, context)
By Liz Hampton
July 5 (Reuters) - Halliburton Co said on Wednesday it has acquired oilfield equipment supplier Summit ESP Inc, a move that helps the third largest oilfield services company by revenue enhance its presence in the artificial lift business.
Tulsa, Oklahoma-based Summit ESP, which is backed by Oklahoma energy and banking billionaire George Kaiser, makes electric submersible pumps used to maintain well pressure to increase oil and gas production in aging wells. The devices, components in a business called artificial lift, increasingly are being used to prolong the life of shale wells.
Financial terms of the deal were not disclosed. The transaction closed on Monday, Halliburton spokeswoman Emily Mir said on Wednesday.
Halliburton said it will fold Summit into its existing artificial lift business. Summit Chief Executive John Kenner will become senior director of Halliburton’s ESP and Horizontal Pumping Systems (HSP) unit, reporting to Greg Schneider, Halliburton’s vice president of artificial lift business, according to Mir.
Summit, which will keep its offices in Tulsa, was founded in 2011 and is led by executives including Kenner, who earlier held senior posts at Baker Hughes. Summit had revenue of about $180 million last year, according to researcher Spears & Associates.
Reuters reported in June that Halliburton was in late-stage talks to acquire Summit.
While the acquisition gives Halliburton a stronger foothold in the artificial lift business, the company will still lack a dominant market position compared with competitors Schlumberger NV and Baker Hughes, a General Electric Co firm.
“The company may not be done expanding there,” energy investment firm Tudor Pickering Holt said in a note on Wednesday.
Artificial lift is an approximately $12 billion-a-year global business, according to market researcher Frost & Sullivan, and dominated by Schlumberger, Baker Hughes and Weatherford International PLC. Electric submersible pumps are an about $5 billion-a-year part of that, it estimates.
Halliburton had been the second largest oilfield services company behind Schlumberger, but fell to third following the closing of a merger between Baker Hughes and GE Oil and Gas this week.
Summit has expanded its business quickly in the United States and Canada as drillers seek to pump more oil from shale wells, which have a faster rate of production decline than conventional wells. In May announced it had installed its 8,000th electric submersible pump (ESP), an increase of 1,000 since November. (Reporting by Ahmed Farhatha in Bengaluru; Editing by Sriraj Kalluvila and Jonathan Oatis)