Basic Energy Services unveiled the results of its bankruptcy auction on Sept. 16, with winners surpassing the original bids.

The Fort Worth, Texas-based oilfield service company, which voluntarily filed for Chapter 11 bankruptcy last month, had previously agreed to sell its businesses divided up among three separate buyers acting as “stalking horse” bidders in a court-supervised sale process pursuant to Section 363 of the U.S. Bankruptcy Code.

“We believe the asset purchase agreements will enable us to maximize the value of our businesses and create the best path forward for our customers, partners, employees and the communities we serve,” Keith Schilling, president and CEO of Basic, commented in a release from Aug. 17.

The winners, according to a court filing on Sept. 16, were comprised of:

  • Berry Corp. will acquire Basic’s California business lines for $43 million, higher than its original $27 million stalking-horse bid;
  • Ranger Energy Services Inc. will acquire substantially all of Basic’s well servicing and completion and remedial segment assets outside of California for roughly $36.7 million, beating out the original stalking-horse bidder; and
  • Select Energy Services LLC will acquire substantially all of the company’s water logistics segment assets outside of California, including all of the assets of Agua Libre Midstream  LLC, for $20 million, its original stalking-horse bid.

In a separate statement, Ranger, the Houston-based oilfield service provider which beat out stalking-horse bidder Axis Energy Services Holdings LLC for Basic’s business lines outside of California, said the acquisition will continue its expansion.

An independent provider of well service rigs and associated services in the U.S. with a focus on unconventional horizontal well completion and production operations, Ranger has been expanding the scale and scope of its business throughout 2021 through strategic acquisitions.

In May, Ranger agreed to acquire Patriot Completion Solutions LLC, a portfolio company of White Deer Energy LP focused on wireline evaluation and intervention services. Soon after the Patriot deal, Ranger followed up with an acquisition in July of PerfX Wireline Services, a privately held Denver-based service company currently operating wireline pumpdown crews in U.S. shale plays across Oklahoma, North Dakota and Texas.

Terms of both transactions, which consideration comprised entirely of stock, weren’t disclosed.

In a Sept. 16 release, Ranger indicated it plans to pay for the cash purchase of its Basic asset acquisition from a private placement newly issued Series A convertible preferred stock.

“We are very pleased to continue the expansion of our scale and scope with this latest acquisition,” commented Stuart Bodden, who was appointed president and CEO of Ranger in early September.

“Combined with the Patriot and PerfX transactions earlier this year,” Bodden continued, “the Basic assets strengthen our ability to serve clients in our markets and to drive ongoing growth in both revenue and free cash flow.”

The closing of the transaction is subject to various conditions, including approval by the bankruptcy court. A hearing to seek court approval is scheduled for Sept. 23, and the transaction is expected to be concluded by the end of September. 

Piper Sandler is serving as exclusive financial adviser to Ranger with respect to the Basic asset acquisition and sole placement agent with respect to the private placement of preferred stock as well as debt financing. Winston & Strawn LLP is serving as legal counsel to the company.

The closing of the private placement is subject to various conditions, including the simultaneous close of the Basic asset acquisition. Ranger is expected to contribute a portion of the $42 million in proceeds from the private placement to fund the Basic asset acquisition.

Weil, Gotshal & Manges LLP is Basic’s legal counsel, Lazard is financial adviser and AlixPartners LLP is restructuring adviser.

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