Three years after $1 billion Venezuela deal, U.S. oilfield firm shuts doors

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Three years after $1 billion Venezuela deal, U.S. oilfield firm shuts doors

An Oklahoma oilfield company that played a central role in Venezuela’s high profile attempt to convince the world it could halt production declines at its dilapidated oilfields has shut its doors, according to three people familiar with the matter.

In 2016, Horizontal Well Drillers, a closely held U.S. driller, won a $1.29 billion contract to drill 191 wells in Venezuela’s Orinoco Belt, part of an unusual plan to sharply boost output and halt Venezuela’s economic collapse. It and two other drilling contractors were asked to finance the work themselves and be paid in future production, according to documents obtained by Reuters at the time.

But the blockbuster deal did not pan out for the company, its Canadian lender Callidus Capital Corp, or for Venezuela. Horizontal never completed the wells, its financial backer took a provision for losses on the loan, and Venezuela’s production continued to fall.

Todd Swanson, Horizontal’s former chief executive who attended the contract signing ceremony in Venezuela, did not respond to a request to his personal email or a LinkedIn account seeking comment. Jeremy Klein, its former president, also did not respond to requests for comment.

David Moore, an attorney for Callidus, wrote in response to requests for comment that “any reporting on the Horizontal matter would necessitate a meticulous review and understanding of the existing public disclosure, which is utterly lacking from your inquiries.”

Moore did not respond to questions about the size of the loan, recoveries or other specifics. But he emailed legal documents citing a previous allegation by Callidus that one of its former executives had tampered with the Horizontal loan. That litigation centers on claims by Callidus and its main owner, Catalyst Capital Group Inc, that various investors, borrowers and journalists had conspired to hurt the two Toronto companies.

PDVSA did not reply to a request for comment on the agreement.

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