Viking Oilfield Services/Viking International Equals Value Creation

Viking International and Viking Oilfield Services represent two completely different dynamics when it comes to evaluating oilfield service companies in terms of associated risk and upside growth potential.
Viking International Limited, established in 2008, entered the markets of Turkey and Morocco with the primary thesis of servicing the exploration and development needs of its parent company TransAtlantic Petroleum. The growth of TransAtlantic facilitated the need for rapid growth of the services required, which included services such as seismic acquisition, location construction, drilling, cased-hole wireline, fracture stimulation, cementing, mudlogging, underbalanced services, trucking, well-testing, workover and rental services. As a result, Viking International quickly positioned itself to be recognized as the premier oilfield service provider in Turkey allowing for selective expansion opportunities in Turkey and surrounding countries. However, due to the substantial investment, both in capital and personnel, the decision was made to maintain a status quo mentality with respect to growth in third party marketing efforts. The focus for Viking International has continued to center around servicing TransAtlantic Petroleum while reserving marketing efforts to third party prospects only when idle capacity presented opportunities. While this has limited the ability of Viking International to capitalize on opportunities for growth in Turkey, it has allowed TransAtlantic the ability to execute its exploration and production goals of reducing well cost through its vertical integration business philosophy.

Viking Oilfield Services, established in 2010, sought to capitalize on the market opportunities we believe present huge upside potential, primarily, in the Kurdistan Region of Northern Iraq. Much like in Turkey, services available were very limited in both scope and quality which presented VOS with an entry to market with state of the art equipment, focusing on drilling, coil tubing and underbalanced services. VOS recognized that while development of the regional oilfields is in its infancy in the KRG, the ability to provide early services for the IOC’s exploration needs will present immediate opportunity for foundational growth once development begins while maintaining a high utilization of equipment during exploration, which can be substantiated by early contracts obtained with Hunt Oil, Western Zagros and GEP. In the midst of marketing Viking Oilfield Services in the KRG, opportunities have rapidly surfaced in surrounding regions such as Poland, Egypt, Iraq proper, Israel and Turkey that will allow VOS early entry into developing markets providing substantial upside growth potential given adequate capitalization for services initially focused on Drilling, Pressure Pumping, Seismic Acquisition and Cased Hole Wireline.

Currently, VIL and VOS are differentiated not only by ownership structure, but by philosophical and geographical differences with respect to their marketing and business models. Viking International Limited represents a predictable and sustainable income stream in which its core business will continue to be driven by the growth of TransAtlantic Petroleum. Viking Oilfield Services represents huge upside potential in markets that are starved for oilfield services allowing for large margins and rapid expansion. The combination of these two companies will present a unique opportunity that allows for synergies to be capitalized on including, but not limited to: shared management, infrastructure, equipment, real estate and capital accessibility. The combination of VIL and VOS represents a rare opportunity in today’s market that allows for companies in the same sector to combine their assets providing for exponential, as opposed to linear growth and profitability.