Fort Worth energy firm acquires well services firm, reports 4Q, 2019 results

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Fort Worth-based Basic Energy Services Inc. (OTCQX:BASX)on March 9 announced that it has acquired the production operations from NexTier (NYSE:NEX) for approximately $94 million.

The NexTier production operations, known as C&J Well Services, originally established in San Angelo, in 1948 by Frank Pool, founder of Pool Well Servicing, is the third largest rig servicing provider in the U.S. C&J Well Services has a leading footprint in California and comes with a blue-chip customer base, according to a Basic Energy news release.

“This transaction solidifies Basic’s foundation to become the leading and most trusted production services provider in the country,” said Keith L. Schilling, president and CEO of Basic. “Starting with the near-complete sale of our pumping services assets, we have taken important steps to bolster our core production-focused businesses, enhance our credit profile and ultimately position the company for future growth and leadership. With an expanded customer base in active basins, achievable synergies and an enhanced cash flow and credit profile, Basic will be well positioned to increase stockholder value. In addition, by combining these businesses, we believe we will leverage our premier assets and geographic positions to efficiently manage through market cycles. Importantly, we expect our increased operating scale, enhanced credit metrics and strong cash flow generation will enable the company to continue to de-lever while remaining a disciplined but active participant in the ongoing consolidation occurring in our industry.”

Jack Renshaw, current senior vice president of C&J Well Services, will join Basic to lead the newly formed Western Region, consisting of all California and Rocky Mountain operations.

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Jim Newman, senior vice president, Region Operations, will continue to oversee operations in the Permian and Central Regions, as well as Agua Libre Midstream. Adam Hurley, current vice president, Strategy and Business Development of Basic, will take on the role of Chief Integration Officer, and will be responsible for overseeing the integration process, including optimizing the combined business model and extracting cost synergies.

According to Basic Energy, the addition of C&J creates the leading well services provider in the U.S. Together with C&J Well Services, Basic will expand the country’s leading workover fleet, which includes 411 high spec rigs, and will now be nearly 5,000 employees strong across 11 states, according to the news release. It will also expand the company’s footprint in the Permian, California and other key oil basins with blue-chip customers: C&J Well Services brings to Basic a high-quality, complementary operating network and customer base, with a material presence in the most prolific U.S. basins, including a premier Permian position. In California, where well servicing requirements are unique, C&J Well Services is the “first call provider” for the largest and most active operators in the state.

Dallas-based Weil, Gotshal and Manges LLP represented Basic Energy in the deal, with corporate partner Jim Griffin serving as the team’s lead attorney.Morgan Stanley & Co. LLC served as Basic’s financial adviser.

On March 9, Basic Energy also provided its fourth quarter and full-year earnings.

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The company reported a loss of $87.8 million in its fourth quarter.

On a per-share basis, the Fort Worth, Texas-based company said it had a loss of $3.52. Losses, adjusted to account for discontinued operations, were $1.30 per share.

The oil and gas field service company posted revenue of $121.9 million in the period.

For the year, the company reported that its loss widened to $181.9 million, or $6.96 per share. Revenue was reported as $567.3 million.

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The company’s shares closed at 17 cents. A year ago, they were trading at $3.95.


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