Co.'s services: Directional Drilling, which is comprised of directional drilling services, downhole navigational and rental tools businesses and support services Pressure Pumping, which provides hydraulic fracturing stimulation services, cementing services and acidizing services Pressure Control, which supplies a variety of equipment, services and expertise and Wireline, which provides new well wireline conveyed tight-shale reservoir perforating services. QES, backed by private equity fund Quintana Capital Group, was advised on the deal by Simmons & Company, while Archer sought advice from Bank of America Merrill Lynch.Quintana Energy Services is a provider of oilfield services to onshore oil and natural gas exploration and production companies operating in conventional and unconventional plays in all of the main basins throughout the United States. It is expected to close by the end of the year. The transaction is subject to customary approvals, including regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act. Cost savings will be achieved by facility consolidation.” “No cash changes hands (little to no EBITDA is being generated today by much of the onshore services industry) and attempts to build scale to make it through to the next cycle. “This flavour of deal is likely typical of onshore oil service deals,” analysts at investment bank Tudor Pickering Holt said. “We believe this combination represents the type of consolidation that must occur across the oilfield services sector to address the challenges of the current market environment,” Herndon said.Īnalysts agreed with Herndon and said they expected similar all-stock mergers in the future. The combined company would have had revenue of more than $1.1 billion and adjusted earnings of more than $178 million in 2014 and will have about 1200 employees. “With the benefits from added scale, meaningful operating efficiencies and a solid balance sheet, we are positioning the platform to effectively manage the current industry downturn and capitalise on opportunities as the North American market improves.” “The combination augments QES’s existing operations in pressure pumping, directional drilling and wireline, while adding complementary service offerings in coiled tubing and snubbing,” QES chief executive Rogers Herndon said. Those assets include a fracturing fleet totalling 208,000 horsepower, 23 coiled tubing units, 33 snubbing units, 23 nitrogen pumping units, 25 fluid pumping units, 78 wireline units, 57 directional kits and 450 mud motors, Archer said.īefore the deal, QES operated about 200,000 horsepower, 24 cementing units, eight wireline units, 63 directional kits and 375 mud motors. In return, Archer will contribute its pressure pumping, wireline and directional drilling units to the new company, which will continue to operate under the QES name. Under the terms of the deal, Archer will receive common shares in QES equal to a 42% stake in the combined entity. Private equity-backed Quintana Energy Services (QES) is merging with the US onshore services arm of Oslo-listed Archer in an all-stock deal that analysts say is a harbinger of future consolidation in the US support market.
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