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Energy Liberty moves in as Schlumberger exits fracking

Liberty moves in as Schlumberger exits fracking

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Robert Francis
Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

Oilfield services giant Schlumberger (NYSE: SLB) has exited the fracking business.

The company announced on Sept. 1 that Denver-based Liberty Oilfield Services Inc. (NYSE: LBRT) will acquire Schlumberger’s U.S. and Canadian fracking business.

The transaction is expected to close in the fourth quarter of 2020 and is subject to Liberty stockholder approval, regulatory approvals and other customary closing conditions. Following the closing of the transaction, Liberty will offer suites of completion services and technologies to operators in onshore North America. Liberty will continue to be led by its current management team.

Schlumberger Chief Executive Officer Olivier Le Peuch commented, “I’m very proud we have reached this agreement to combine our OneStim business with a leader in North American hydraulic fracturing who shares a like-minded focus on customers, technology, people and our safety culture. 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. Alongside the comprehensive suite of services and products that Schlumberger continues to offer in North America land, this partnership with Liberty will uniquely position us to leverage our technology and scale to significantly improve our customers’ performance.

Some key transaction features, and strategic rationale, are:

  • Combination of Liberty frac assets with the technology and scale of Schlumberger OneStim, a significant division of the world’s leading oilfield services company.
  • Financially compelling transaction with strong benefits for Liberty and Schlumberger shareholders, creating one of the largest pressure pumping companies in North America.
  • 2019 combined pro-forma revenue of $5.2 billion and substantial earnings power.
  • Combined pro-forma market capitalization of $1.2 billion and a robust pro forma balance sheet with no net debt and significant available liquidity.
  • Expanded technology and operating capabilities will further increase E&P operator efficiencies, enhance shale asset economics and raise the bar for sustainable and environmentally conscious frac operations.
  • World-class completions data and technology portfolio including the most comprehensive production and completions database, Big Data analytics, advanced software for reservoir modeling and designing optimal completions, and frac fleet automation and electrification.
  • Alliance agreement will provide for future collaboration and access to the companies’ technology portfolios beyond the scope of this transaction, such as Schlumberger’s digital platform, subsurface expertise, downhole completions equipment, frac trees and flowback technology.

The exit follows similar moves in the past few years by Baker Hughes Co. and Weatherford International Plc. Halliburton Co. remains in the business.

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