The sale of OneStim to Liberty includes Schlumberger’s pressure pumping, pumpdown perforating, and Permian frac sand businesses. (Source: Hart Energy)
Schlumberger Ltd. is selling its North America fracking business to Liberty Oilfield Services Inc. as the Houston-based oilfield services giant shifts its focus away from the U.S. shale business.
Alongside peers Halliburton Co. and Baker Hughes Co., Schlumberger has begun planning for a significantly leaner future following the worst price cash in decades, leading the big three service providers away from the high-cost shale industry.
In a joint release on Sept. 1, Schlumberger said it agreed to contribute OneStim, its onshore hydraulic fracturing business in the U.S. and Canada, to Denver-based pressure pumper Liberty Oilfield Services. In exchange, Schlumberger will receive a 37% equity interest in the combined company, which is expected to have a $1.2 billion market cap.
The announcement follows plans Schlumberger outlined in July for deeper spending cuts after recording a $3.7 billion charge, a second straight quarterly loss and cutting thousands of job. The job cuts also included the closure of 150 North American facilities.
The sale of OneStim to Liberty includes Schlumberger’s pressure pumping, pumpdown perforating, and Permian frac sand businesses. The transaction, set to close fourth-quarter 2020, is expected to create one of the largest pressure pumping companies in North America.
In a statement commenting on the sale of OneStim, Schlumberger CEO Olivier Le Peuch said: “This partnership provides an ideal home for our OneStim business and its employees and is in line with our capital stewardship strategy while benefiting from future market upside through our equity stake.”
RELATED:
Parched US Shale Patch Crushes Oilfield Services Sector
Following the acquisition of OneStim, Liberty will have a robust balance sheet with no net debt and significant available liquidity, according to the joint release.
Additionally, the combined company has a 2019 pro forma revenue of $5.2 billion, the release said.
In a recent interview with Oil and Gas Investor, Chris Wright, CEO and chairman of Liberty Oilfield Services, said he expected Liberty to grow through this cycle.
Liberty was forced to make staff cuts earlier this year for the first time in company history, Wright said, due to the collapse in oil prices.
“It’s not only our goal; it’s our mission as this thing rebounds to grow the business back up and bring everyone back,” he told Oil and Gas Investor.
In the joint release on Sept. 1, Wright described the OneStim transaction with Schlumberger as a transformative step forward in Liberty’s journey as a company.
“The last several months have been extremely challenging for the world, the industry and the Liberty family,” he said in a statement on Sept. 1. “These times also bring opportunity.”
“Our expanded technology portfolio and breadth of operations will enable Liberty to further raise our already high bar for safe, innovative, efficient and ESG-conscious frac operations,” he continued.
Recommended Reading
Midcon Momentum: SCOOP/STACK Plays, New Zones Draw Interest
2024-09-03 - The past decade has been difficult for the Midcontinent, where E&Ps went bankrupt and pulled back drilling activity. But bountiful oil, gas and NGL resources remain untapped across the Anadarko, the SCOOP/STACK plays and emerging zones around the region.
CEO: Coterra Drops Last Marcellus Rig, May Halt Completions
2024-09-12 - Coterra halted Marcellus Shale drilling activity and may stop completions as Appalachia waits for stronger natural gas prices, CEO Tom Jorden said at an industry conference.
Mach Taps Equity Markets to Fund $136MM in Midcontinent M&A
2024-09-04 - Mach Natural Resources is offering to sell common units to fund two pending acquisitions in the Ardmore and Anadarko basins.
Diamondback Touts Land, Cheap Gas to Lure Data Centers to Permian
2024-11-05 - With 65,000 land acres, cheap natural gas and an abundant produced water supply, Diamondback wants to lure power-hungry data centers to West Texas.
Asset Manager Buys SandRidge Stake, Looks for More Midcon M&A
2024-10-22 - Investment manager Third Avenue believes Midcon E&P SandRidge Energy is primed for M&A and a boost to shareholder returns.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.